InvestorQ : Why has the trade deficit for September 2021 widened to a record level?
Mitali Bhutta made post

Why has the trade deficit for September 2021 widened to a record level?

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2 months ago
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The trade deficit for the month of Sep-21 as per preliminary trade data put out by the Commerce Ministry has come in at a whopping $23 billion. Merchandise imports at $56.4 billion in Sep-21 were 84% higher on a yoy basis and nearly 25% higher over the July import data. After a long time, the forex reserves have fallen to below 12 months of annualized import data, which does make the fiscal situation vulnerable at this point of time.

If imports spurted, the exports lagged despite solid yoy growth. In fact, merchandise exports exceeded pre-pandemic levels for the seventh month. Exports at $33.3 billion for Sep-21 were up 7 months in a row. It was 57% higher over Sep-20 and 24% above Sep-19 levels. Exports were strong in value-added sectors like engineering goods and gems & jewellery. However, it was still not sufficient to fill the import surge gap.

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