IN: Merchandise Trade Balance

Thu Jun 14 19:00:00 CDT 2018

Actual Previous
Balance $-14.62B $-13.72B
Exports Y/Y 20.2% 5.17%
Imports Y/Y 14.85% 4.6%

India's merchandise trade deficit widened from $13.72 billion in April to $14.62 billion in May. Exports rose 20.2 percent on the year in May, well up from 5.17 percent on the year in April, while year-on-year growth in imports accelerated from 4.60 percent to 14.85 percent. Higher global energy prices again made a significant contribution to the trade deficit with the value of India's oil imports up around 50 percent on the year in May.

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.