Submission Statement: India’s August goods trade deficit narrowed sharply to $26.9B versus $32.2B expected, as exports surged 26.1% y/y to $43.8B while imports rose 14.1% to $70.7B. Export demand was broad-based across the US, EU and emerging markets, while higher imports partly reflected strong domestic growth, manufacturing-input demand and elevated energy prices. The print may ease some pressure on the rupee, though oil above $100 remains a major vulnerability given India imports nearly 90% of its crude. The broader story is improving trade momentum alongside continued diversification: India has concluded an EU FTA, signed a New Zealand deal, and is advancing negotiations with Canada and the US. One month does not establish a trend, but the export acceleration is another datapoint suggesting India’s external sector may be improving faster than its still-large headline deficit implies.
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Submission Statement: India’s August goods trade deficit narrowed sharply to $26.9B versus $32.2B expected, as exports surged 26.1% y/y to $43.8B while imports rose 14.1% to $70.7B. Export demand was broad-based across the US, EU and emerging markets, while higher imports partly reflected strong domestic growth, manufacturing-input demand and elevated energy prices. The print may ease some pressure on the rupee, though oil above $100 remains a major vulnerability given India imports nearly 90% of its crude. The broader story is improving trade momentum alongside continued diversification: India has concluded an EU FTA, signed a New Zealand deal, and is advancing negotiations with Canada and the US. One month does not establish a trend, but the export acceleration is another datapoint suggesting India’s external sector may be improving faster than its still-large headline deficit implies.
!ping IND