India’s February trade deficit widens to $18.71 billion, exports at 11-month high

NEW DELHI : India’s Merchandise Trade deficit widened to $18.71 billion in February from $17.49 billion in January, the commerce ministry said on March 15. The trade deficit stood at $16.57 billion in February 2023. While the trade deficit widened in February, exports rose by 11.9 percent from the year-ago period to $41.40 billion and imports were up 12.2 percent at $60.11 billion.

At $41.40 billion, India’s merchandise exports in February were the highest in 11 months. The last time they were higher was in March 2023, when they come in at $41.96 billion. Imports, meanwhile, were at a four-month high.

The year-on-year growth in exports of engineering goods (15.9 percent), electronic goods (54.81 percent), organic and inorganic chemicals (33.04 percent), drugs and pharmaceuticals (22.24 percent) played a crucial role in pushing up outbound shipments of Indian goods in February.

“For the month of February 2024, under merchandise exports, 22 of the 30 key sectors exhibited positive growth as compared to same period last year (February 2023),” the commerce ministry said in a release.

In terms of the year-on-year increase, the export growth seen in February is the highest since a 30.1 percent rise was posted in June 2022. The import growth of 12.2 percent in February is the highest since September 2022’s 12.6 percent.

“Despite the Ukraine war, Suez Canal, tight monetary policies in western world and fall in commodity prices, February trade data has surpassed all our expectations, with highest export growth achieved in both goods and services in the last 11 months,” Commerce Secretary Sunil Barthwal told the media.

“When we close 2023-24, (we) expect overall exports to be higher than last fiscal’s record export figures,” he said.

India’s merchandise exports in 2022-23 were $451.07 billion, while services exports stood at $325.33 billion. Total exports amounted to $776.40 billion, 14.8 percent higher than in 2021-22.

For April 2023-February 2024 as a whole, India’s trade deficit amounted to $225.20 billion, down from $245.94 billion in the first 11 months of 2022-23. This exhibits a decline of 8.43 percent on the trade gap on a year-on-year basis during this period.

On the services side, exports are projected to grow at 17.34 percent in February 2024 on a year-on-year basis, while imports are seen rising by a smaller 2.81 percent during the same period.

The estimated value of services export for April-February 2023-24 was $314.82 billion against $294.89 billion in the year-ago perio. Services imports for this period in FY24 is expected to be $161.86 billion compared $165.09 billion in the first 11 months of the previous fiscal.

The services trade surplus for April-February 2023-24 is estimated at $152.96 billion as against $129.80 billion in April-February 2022-23.

Overall trade deficit for April-February 2023-24 (goods and services) is estimated at $72.24 billion as compared to the deficit of $116.13 billion during the same period in 2022-23, registering a decline of 37.80 percent.