New Delhi: Positive annualised growth in exports and imports for three straight months has taken India’s trade deficit figures to pre-Covid levels, Acuite Ratings & Research said.
In its report on the February Trade Balance, the ratings agency said that bulk of normalisation is likely to have been driven by the sharp increase in global commodity prices, especially in the last 4-5 months.
“Going forward, as activity levels pick up further, the widening of India’s trade deficit would get reinforced,” it said.
India’s merchandise trade deficit has eased to $12.6 billion in February 2021 from $14.5 billion in January but printed higher than $10.2 billion posted during the corresponding period of last year.
“The sequential moderation in merchandise trade deficit in Feb-21 was accompanied by a marginal increase in exports along with a marginal decline in imports vis-a-vis the previous month,”.
“This appears to be in line with the usual seasonal trend.”
Earlier, official data showed a rise in India’s February merchandise exports to $27.93 billion from $27.45 billion in January and $27.74 billion reported for the corresponding period of 2020.