The merchandise trade deficit for FY24 narrowed 9.3 per cent to $240 billion while overall trade deficit improved 35.77 per cent to $78.12 billion. Even in the month of March, merchandise trade deficit moved to a 11-month low of $15.60 billion.
In FY24, merchandise exports declined 3.10 per cent to $437.06 billion against $451.07 billion in the previous fiscal, while merchandise imports were down 5.4 per cent to $677.24 billion as against $715.97 billion in FY23. Thus the merchandise trade deficit narrowed to $240.17 billion against $264.90 billion.
Merchandise trade deficit for March narrowed to a 11-month low of $15.60 billion as merchandise exports and imports in March stood at $41.68 billion and $57.28 billion respectively.
Main drivers of merchandise export growth in FY24 were electronic goods which grew 23.64 per cent, apart from drugs and pharmaceuticals, engineering goods, iron ore, cotton yarn, fabrics and made-ups, handloom products and ceramic products and glassware.
Estimated services export for the year was up 4.3 per cent to $339.62 billion while services imports were down 2.7 per cent to $177.56 billion for the year and this improved the trade surplus by 13.2 per cent to $162.05 billion. This also helped the overall trade deficit improve by 35.77 per cent to $78.12 billion from $121.62 billion. Overall exports remained flat at $776 billion and overall imports were down 4.81 per cent to $854.80 billion.
"Led by a larger y-o-y decline in merchandise imports vis-à -vis such exports, India’s merchandise trade deficit eased to an 11-month low of $15.6 billion in March 2024, while also trailing the levels seen in the year-ago month, amid a halving of gold imports and a fall in non-oil non-gold imports. This is expected to augur well for the current account number in Q4 FY2024, which may witness a small, transient surplus of $1-2 billion in the quarter," Aditi Nayar, Chief Economist, Head Research and Outreach, ICRA.
