Despite a continued contraction in exports (-1.1% YoY), lower oil prices resulted in India’s trade deficit coming in at US$7.6bn – a nine
month low. Adjusting for lower exports and imports in the remaining months of this fiscal, we expect the customs trade deficit in FY09 to come in at US$108bn v/s 80bn in FY08. For FY10, we maintain our view that despite a contraction in exports, lower imports/new oil discoveries
will result in an improvement in the trade deficit to US$97bn.
Exports at US$12.7bn contracted for the third consecutive month (-1.1% YoY). Imports at US$20.3bn were up 8.8%. What was of surprise was the 32% rise in non-oil imports (Details unavailable as commodity data is out with a 3month lag) But sharply lower oil prices resulted in the trade deficit coming in at US$7.6bn – a nine-month low.