India's Trade Deficit Narrows In September Amid Slow Import Growth

ENA Sectors 2024-10-17 17:10:19 New Delhi, Oct 17 (KNN) India's merchandise trade deficit declined to a five-month low of USD 20.78 billion in September, according to official data released on Wednesday. This marks a significant decrease from the 10-month high of USD 29.65 billion recorded in August. The narrowing deficit is attributed to a combination of slower import growth and a marginal increase in exports following two months of decline. Import growth in September slowed to its lowest pace in six months, with goods valued at USD 55.36 billion entering the country. This represents a modest 1.62 percent increase compared to the same period last year, influenced in part by softening global petroleum prices. Notably, petroleum product imports contracted by 10 percent to USD 10.51 billion. Gold imports, while showing a 6.9 percent year-on-year increase to USD 4.39 billion, experienced a substantial 56 percent sequential contraction. This follows a significant surge in August when gold imports reached USD 10 billion, driven by factors such as pre-festive season stocking and a reduction in import duty from 15 percent to 6 percent in July. On the export front, India's outbound shipments rose marginally by 0.5 percent to USD 34.58 billion in September. This modest growth comes despite challenges posed by muted global demand and geopolitical tensions. Key export sectors faced headwinds, with petroleum products, which constitute nearly 14 percent of India's exports, contracting by over a quarter to USD 4.73 billion. Similarly, gems and jewellery exports declined by 11.5 percent to USD 2.82 billion. Commerce Secretary Sunil Barthwal offered a positive perspective, stating that India's export performance was outpacing the global average. He highlighted that merchandise exports had performed well in the first half of the current fiscal year, growing by 1 percent to reach USD 213 billion. During the same period, imports saw a 6 percent increase, totaling USD 350.66 billion. Encouraging signs emerged in certain export categories. Non-petroleum and non-gems and jewellery exports, considered a clearer indicator of export health, grew by 9.6 percent to USD 27 billion in September. Sectors demonstrating growth included engineering goods (10.55 percent), electronic goods (7.89 percent), drugs and pharmaceuticals (7.22 percent), and readymade garments (17.3 percent). Federation of Indian Export Organisations (FIEO) President Ashwani Kumar pointed to ongoing international trade disruptions and volatility in crude and metal prices as factors affecting export values. He also highlighted logistical challenges stemming from rising tensions between Israel and Iran, impacting trade routes to Europe, Africa, CIS countries, and the Gulf region. In the services sector, exports grew by 7.7 percent to USD 30.61 billion in September, while imports rose by 11 percent to USD 16.32 billion, resulting in a surplus of USD 14.29 billion. However, it was noted that these figures are preliminary estimates subject to revision based on subsequent data from the Reserve Bank of India. (KNN Bureau) 39628 https://knnindia.co.in/news/newsdetails/sectors/indias-trade-deficit-narrows-in-september-amid-slow-import-growth 2024-10-17 17:10:19 knnindia.co.in India's Trade Deficit Narrows In September Amid Slow Import Growth