Trade Deficit At Record High In November As Exports Moderate

India's trade deficit widened in November as exports fell more than imports sequentially.

Preliminary trade data released by the government shows that the trade deficit for November was at $23.27 billion compared with $19.73 billion in October. This, according to ICRA Ratings, is the highest on record.

• Merchandise imports were at $53.51 billion in November.

• Imports were up 57.18% year-on-year but down 3.3% month-on-month.

• Merchandise exports were at $29.88 billion.

• Exports were up 26.5% year-on-year but down 16.2% month-on-month.

Key Export Items

• Engineering goods exports stood at $8.1 billion, up 37% year-on-year. They were, however, lower than the $9.4 billion from October.

• Petroleum product exports at $3.8 billion were 145% higher than a year ago, but lower than the $5.3 billion in October.

• Gems and jewellery exports were at $2.4 billion in November compared to $4.2 billion in October. They were 11% lower than a year ago as well.

• Electronic goods exports were steady sequentially at $1.4 billion, up 30% over the preceding year.

Key Import Items

• Petroleum, crude and product imports were up 132% over a year ago at $14.7 billion. Imports were only marginally higher than the $14.4 billion in October.

• Electronic goods were at $5.7 billion, up 22% over a year ago. Imports fell compared to $6.8 billion in October.

• Gold imports at $4.2 billion were 37% higher than a month ago, but lower than $5.1 billion last month.

"The holidays in the festive season have substantially dented the momentum in merchandise exports in November 2021, bringing them down to the lowest level of FY22," said Aditi Nayar, chief economist at ICRA. "We're cautiously optimistic that the exports momentum will revive, although the uncertainty engendered by the Omicron variant poses a concern regarding the immediate outlook."