India April trade deficit - Exports subdued while imports rise

India’s trade deficit for Apr’19 stood at $15.33bn as against $10.89bn in Mar’19 above consensus expectation of US$13.5bn, widened to a five-month high in April due to rise in crude oil imports coupled with muted growth in export amid rising concerns over US-China trade war. 

Imports grew by 4.4% YoY in dollar terms to US$41.4bn YoY, down from $43.44 billion in Mar’19 but higher than the $39.63 billion a year ago. The items which showed higher imports include Crude (+9.26%), Gold (+54%), Non oil imports (+2.78%), petroleum products (+9.3%), plastic materials (+3.5%), iron and steel (+11%), non-ferrous metals (+1%), machinery (+6.5%) and electronic goods (+4%) expanded while transport equipment (-31.7%), chemicals (-0.1%) and precious stones (-8.9%) fell.

Oil imports for FY20 in April were $11.38 billion, which was 9.26% higher in dollar terms, compared to $10.41 billion in April 2018, primarily on account of Crude prices. However going into FY20, we sense that Oil import bill shall be surge on account of higher oil prices. Non-oil imports marginally grew by 2.78% YoY at $30.02 billion, compared to $29.21 billion in April 2018 showing that imports are well contained primarily on increase in imports of precious stones as well as electronics in FY19. Gold imports spiked by 54% to $3.97 billion in April. The rise in imports driven by strong demand during wedding season and festival along with fall in prices which prompted purchases.

Exports in Apr’19 stood at $26 billion as against US$32.6bn in Mar’19. They slid to a four-month low of 0.64% YoY in April as shipments of engineering goods, gems and jewellery, leather and other products declined. During April, India’s exports picked up in drugs and pharmaceuticals (+4%), electronic goods (+27.78%), organic and inorganic chemical (+15.06%), readymade garments (+4.4%) and petroleum products (+30.8%), while exports contracted in gems and jewellery (-13.4%) and engineering goods (-7.1%). Non-petroleum and non gems and jewellery exports stood at $19.54 billion, as compared to $19.80 billion in April 2018, exhibiting a negative growth of 1.31%.

While Petroleum product growth showed signs of optimism in April, uncertainty over US-China trade war as well as slowed demand can continue to pose a threat on exports of disceretionary commodities in FY20. 

We expect trade deficit to widen going forward on account of increase in exports, higher crude prices and rupee at $69-$72 levels.


Author Image


Recent Post

  • PC Jeweller Demerges its Expo..

    What’s the deal? PC Jewelers recently announced that it would demerge its Export Division and merge with its wholly owned subsidiary - PCJ Gems & Jewellery Limited. Company c..

  • Insurance- Introduction

    Risk and uncertainty are associated with life in some of the other ways. These risks and uncertainties are increasing daily because of the increment in the speed of life. For example, i..

  • Rail Vikas Nigam Ltd. IPO

      Offer Details Price band Rs 17-19 Per Equity Share Offer Open Date Mar 29, 2019 Offer Close Date Apr 03, 2019 Lot Size..

  • Tech Mahindra Buyback

    The Board of Directors of Tech Mahindra Ltd. approved a share buyback for its investors on Feb 21, 2019. The details of the buyback include: Ex-Date: March 5th, 2019 Record Date: Marc..

  • BHEL Buyback

    The Board of Directors of BHEL approved a share buyback for its investors on Oct 25, 2018. The details of the buyback include:  Record Date: November 6th, 2018 Buyback price: Rs...