India’s merchandise and services trade deficit reached a 21-month low in April, as per the latest data. The reduction was primarily due to a 2% increase in exports, coupled with a decline of 7.92% in imports. Overall exports, which includes merchandise and services, were valued at $65.02 billion in April 2023, up 2% from $63.75 billion in the corresponding month last year. On the other hand, overall imports in April 2023 were $66.40 billion, down 7.92% from $72.11 billion in April 2022. The merchandise and services deficit declined to $1.38 billion in April 2023, from $8.37 billion in April 2022.
In April 2023, India’s merchandise exports fell by 12.7% year-on-year to $34.66 billion, compared to $39.7 billion in April 2022, while imports declined by around 14% to $49.9 billion from $58.06 billion in April 2022. The merchandise trade deficit reduced from $18.36 billion in April 2022 to $14.24 billion in April 2023, and it also decreased sequentially from $19.73 billion in March.
Non-oil items were the primary driver of the year-on-year reduction in the merchandise trade deficit in April 2023, with a drop in crude oil prices being partly offset by higher volumes. Aditi Nayar, Chief Economist at ICRA, said that after a seasonal decline to sub-$5 billion in Q4 FY2023, the current account deficit is expected to be $8-12 billion in the ongoing quarter. In April 2023, non-petroleum and non-gems and jewelry exports were $25.76 billion, compared to $28.37 billion in April 2022, while non-petroleum, non-gems, and jewelry imports were $31.49 billion, down from $36.00 billion in April 2022.
In April 2023, exports of electronic goods increased by 26.49% to $2.11 billion from $1.67 billion in April 2022. However, textile, plastic, and linoleum exports continued to decline in April 2023. Services exports grew faster than imports in April, with services export increasing to $30.36 billion from $24.05 billion in April 2022, while services import for April 2023 was $16.50 billion compared to $14.06 billion in April 2022.
