IN: Merchandise Trade Balance

Fri Dec 15 06:00:00 CST 2017

Actual Previous
Balance $-13.83B $-14.02B
Exports Y/Y 30.55% -1.12%
Imports Y/Y 19.61% 7.6%

India's merchandise trade deficit narrowed from $14.02 billion in October to $13.83 billion in November. This decrease in the deficit was mainly driven by stronger export growth, up 30.55 percent on the year after a fall of 1.12 percent in October. Import growth also accelerated but to a lesser extent, with year-on-year growth picking up from 7.60 percent in October to 19.61 percent in November.

Services trade data are released a month after the equivalent merchandise trade data. Services exports grew 3.06 percent on the year in October after a small gain of 0.23 percent in September, while year-on-year growth in services imports strengthened from a decline of 2.40 percent to an increase of 2.96 percent. This resulted in a services trade surplus of $5.45 billion in October, up moderately from $5.28 billion in September.

The merchandise trade balance measures the difference between imports and exports of goods. The level of the international trade balance, as well as changes in exports and imports, indicate trends in foreign trade and can offer a guide to an economy's competitiveness. Alongside the merchandise data, exports and imports of services are also provided. The statistics, which are not seasonally adjusted, are reported in both local currency and U.S. dollars, the latter being the main market focus.

Changes in the level of imports and exports, along with the difference between the two (the trade balance) are a valuable gauge of economic trends here and abroad. While these trade figures can directly impact all financial markets, they primarily affect currency values in foreign exchange markets.

Imports indicate demand for foreign goods and services in India. Exports show the demand for Indian goods in countries overseas. The rupee can be particularly sensitive to changes in the trade deficit run by India, since the trade imbalance creates greater demand for foreign currencies. The bond market is also sensitive to the risk of importing inflation. Data are reported in US dollars and Indian rupees.