India’s exports in the month of January have shown an upward trajectory by 25.28% to touch $34.50 billion against 38.9% growth in December, due to healthy performance by mostly comprised of engineering, gems and jewellery, petroleum sectors, textiles, electronic goods, cotton yarn in-spite of trade deficit broadened to 17.42 billion,% according to the data furnished by the commerce ministry on Tuesday.
Imports rose at a gradual pace in 11 months period by 23.54% to $51.93 billion during the month under review. The Trade deficit stood at $14.99 billion in January last year. Other than oil, gems & jewellery imports, which represents industrial tasks in the economy, remained at $34.62 billion in January, lower than $35.47 billion in the last month.
“The trip in mobility and the demand for gold with the rising of the third wave and the emerged restrictions, supported to narrow the merchandise trade deficit to a 5 month low in January 2022,” said Aditi Nayar, chief economist, ICRA Ratings. In our aspect, the rise in gold imports in 2021 was accelerated by the pent up demand of 2020. We hope gold imports will moderate to $30-35 billion in 2022,” added Nayar.
Economists anticipate India’s current account deficit (CAD) to expand further over 1.5% GDP in FY22, versus to 0.9% surplus in FY21.
“With the import growth experiencing huge export growth and higher losses in oil-led terms of trade, FY22 CAD-GDP seems to track 1.7% of GDP from the surplus of 0.9% in FY21 new domestic/global headwinds and continuous supply limitations are among the crucial aspects to look after,” said Emkay Global Financial Services in its report.
