Trade Deficit for 8 Months Narrows Significantly as Foreign Trade Data Is Revised

The trade deficit of the April-November 2022 period is $10 billion lower than preliminary estimates. Experts believe that such large variations significantly affect policy making.

New Delhi: The Hindu has reported that India’s foreign trade data for the first eight months of 2022-23 – revised significantly in comparison to the Union commerce ministry’s preliminary estimates – has seen the import bill being scaled up or down by at least $2 billion a month. The report notes the importance of consistency in data and that such wide variations affect policy formulations.

The import bill from April to November in 2022 is now estimated to be $493.5 billion. This amount is about $1.7 billion higher than initial estimates.

Total merchandise exports are at $298.3 billion, nearly $12 billion higher that originally estimated.

Accordingly, the trade deficit of that period is $10 billion lower than the preliminary estimates.

The report notes that the import bill for September has seen the sharpest revision, from $61.1 billion to $64.7 billion. September thus emerged with the highest tally and the worst trade deficit of $29.23 billion.

According to the earlier estimates India’s trade deficit had seen its record high of $30 billion in July. It was $10 billion in the same period last year. After revision, July’s deficit is now pegged at just $25.6 billion. This number is much lower than the August, September and October deficits.

A trade deficit is normally the largest component of a current account deficit. It’s a situation when a country imports more than it exports in a given period of time.

India’s current account deficit touched an all-time high of $36.4 billion, or 4.4% of the GDP, in the second quarter of the current fiscal, mainly on account of a widening trade gap, data released by the Reserve Bank of India in late December 2022 has showed.

“Underlying the current account deficit in Q2:2022-23 was the widening of the merchandise trade deficit to $83.5 billion from $63 billion in Q1:2022-23 and an increase in net outgo under investment income,” the RBI had said.