October 16, 2015

Recently released data related to India’s external sector showed that the trade deficit totaled USD 10.5 billion in September, which was a smaller shortfall over the USD 14.2 billion deficit observed in the same month last year and marked the best result in four months. For the 12 months up to September, the trade deficit recorded USD 134.6 billion, which was also a smaller shortfall than the 138.3 billion deficit tallied in the 12 months up to August.



The narrowing in the trade deficit showed that imports contracted a notable 25.1% annually in September, which followed August’s 10.0% drop and marked the largest contraction since September 2009. The contraction was largely the result of the low oil-price environment. Accordingly, oil imports totaled USD 6.6 billion, which represented a 41.6% decrease compared to the same month of the previous year.



Meanwhile, exports recorded the largest contraction since July 2009 and fell 24.4% in September, which followed August’s 20.7% drop.

FocusEconomics Consensus Forecast panelists expect exports to contract 1.7% in FY 2015, reaching USD 314 billion. In FY 2016, the panel sees exports expanding 9.8% to USD 344 billion.