InvestorQ : How did you find the import and export data for January 2021 that was disclosed on 15 February?
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How did you find the import and export data for January 2021 that was disclosed on 15 February?

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2 weeks ago
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While the government disclosed the indicative trade deficit and import / export numbers in the first week of the month, the detailed trade data with combined trade deficit of merchandise and services is only put out by the middle of the month. There are some interesting takeaways from the trade data announced on 15 February.

The trade data announced for the month of Jan-21 reported merchandise trade deficit of $14.54 billion. The merchandise trade deficit is the trade deficit arising purely from the trade in physical goods and excludes services from its ambit. This trade deficit is slightly lower than the trade deficit of $15.45 billion reported in the month of Dec-20.

For the month of Jan-21, the total merchandise exports stood at $27.45 billion and the total merchandise imports stood at $41.99 billion. The difference between the two is the merchandise trade deficit. One reason for the sharply higher imports is the sharp spike in crude prices to beyond $62/bbl which drove sustained high levels of trade deficit.

India currently relies on imports to meet nearly 80% of its daily crude requirement. This puts the Indian economy in a piquant situation. Another drive for higher imports is that a pick-up in economic activity also entails higher imports. In addition, gold imports also picked up in the month of January due to festive demand in the last quarter.

To get a picture, you must also look at the overall trade deficit including services. For the first time in fiscal 2020-21, the overall trade balance slipped into an overall deficit of $-1.87 billion. This is likely to pressure the current account deficit for the fiscal year. On a yoy basis, imports were up 2.03% while exports grew 6.16% in Jan-21.

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