Trade deficit dips to lowest in 1 yr at $17.75 billion; exports, imports shrink

New Delhi/IBNS: The trade deficit in the month of January dipped to the lowest in a year at $17.75 billion, as both merchandise exports and imports dropped for the second consecutive month amid lukewarm external demand and a steep decline in gold imports.

IBNS • 16 Feb 2023, 12:40 am

Merchandise exports contracted 6.5 percent year-on-year (YoY) to $32.91 billion in January due to a decline in demand from some of the significant markets in developed economies owing to tightening monetary policy and high inflation, data released by the commerce and industry ministry showed on Wednesday.

Compared to the month of December, the decline was 4.5 percent.

Imports declined 3.6 percent YoY to $50.66 billion. On sequential basis, there was a bigger decline at 13 percent.

This happened because of an array of factors such as the curbs on non-essential imports, weak domestic demand, and a drop in commodity prices.

Gold imports fell 70.7 percent to $697 million, reducing the current account deficit significantly.