Trade deficit

Trade deficit widens to $21 bn again as imports climb 35%

admin March 4, 2022
Updated 2022/03/09 at 2:08 PM

According to preliminary foreign trade estimates, India’s goods exports increased by 22.3 percent to $33.81 billion in February, while imports increased by 35 percent to $55 billion, expanding the trade imbalance to $21.2 billion.

The trade deficit decreased to about $17 billion in January after reaching a high of $22.9 billion in November 2021 and an average of $21.7 billion from September to December.

The deficit in February was more than twice as large as it was in February 2020, before the pandemic. Last month, fertiliser imports more than quadrupled to $1.6 billion, while coal imports more than doubled to $2.8 billion.

Gold imports totaled $4.68 billion in February, down 11.5 percent from February 2021, but almost quadrupled from January’s $2.4 billion, which helped to close the budget deficit that month.

ICRA chief economist Aditi Nayar said that a resurgence in oil and gold demand as the third wave faded, along with increasing global commodity prices fueled by mounting geopolitical tensions, increased imports, and inflated the goods trade imbalance.

“Interestingly, non-oil, non-gold imports slowed sequentially in February, even as year-on-year growth accelerated,” she said, adding that the goods deficit in March will be decided by the length of the Russia-Ukraine war and the influence on commodities and crude oil prices.

Outbound trade for 2021-22 seems to be on track to exceed $400 billion, has already surpassed $374 billion in February.

Source: The Hindu

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