India’s Feb YoY merchandise exports slips but trade deficit widens (Roundup)

India’s February merchandise exports slipped by 0.25 per cent on a year-on-year basis, preliminary data showed on Tuesday.

Accordingly, the country’s merchandise exports during the month under review grew to $27.67 billion from $27.74 billion in January 2020.

As per the data, during last month, the value of non-petroleum exports rose by 3.55 per cent over February 2020 to $25.16 billion.

“The value of non-petroleum and non-gems and jewellery exports in February 2021 was USD 22.48 billion as compared to USD 21.28 billion in February 2020, registering a positive growth of 5.65 per cent,” a Ministry of Commerce and Industry statement said on the basis of preliminary data.

“In February 2021, Oil imports were USD 8.99 billion, as compared to the USD 10.78 billion in February 2020, a decline by 16.63 per cent.”

In contrast, imports increased by 6.98 per cent to $40.55 billion from $37.90 billion reported for February 2020

“In February 2021, oil imports were USD 8.99 billion, as compared to USD 10.78 billion in February 2020, a decline by 16.63 per cent.”

“Non-oil imports in February 2021 were estimated at USD 31.56 billion, as compared to USD 27.12 billion in February 2020, showing an increase of 16.37 per cent.”

As per the data, non-oil, non-GJ (gold, silver and precious metals) imports were $23.85 billion in February 2021, recording a positive growth of 7.40 per cent as compared to the corresponding period of last year.

Consequently, India widened by 26.74 per cent to $12.88 billion from $10.16 billion in February 2020.

“The merchandise trade deficit in February 2021 was lower than our forecast by US$1 billion, on account of oil imports, and also marked a moderation from the average US$15 billion deficit recorded in the previous two months,” ICRA’s Principal Economist Aditi Nayar said.

“While the overall non oil imports were in line with our expectations, this masks a spike in gold imports, counter-balanced by a month-on-month dip in non oil non gold imports.”

“As per the preliminary estimates, the February trade deficit narrowed to $12.9 billion from the elevated levels seen in the $14.5 billion deficit in January and $15.4 billion in December,” said Madhavi Arora, Lead Economist , Emkay Global.

“As we move into FY22, a gradual recovery would imply import growth to exceed export growth, while higher oil led terms of trade led losses will imply *current account or GDP to be back in deficit of 0.8-1 per cent but healthy capital flows will ensure FY22E BoP remains in surplus of $45-50 billion.”