India’s trade deficit narrowed to the lowest in nine months as softening commodity prices kept India’s import bill in check. 

The gap between exports and imports stood at US$17.5 billion in January, trade ministry data showed on Thursday (Feb 15). That compares with a US$20 billion deficit forecast by economists in a Bloomberg survey and US$19.8 billion gap in December. The reading is the lowest since April last year. 

Exports rose 3.1 per cent from a year earlier to US$36.92 billion in January, while imports grew 3 per cent to US$54.41 billion.

“Despite falling commodity prices and the Red Sea crisis, India achieved positive merchandise exports,” Commerce Secretary Sunil Barthwal told reporters in New Delhi. 

India’s outbound shipments held up despite persistent attacks by Houthi militants on commercial vessels in the Red Sea, which carries 12 per cent of the world’s seaborne trade. To protect domestic trade, Indian authorities have been working out a strategy to reduce disruption. 

A narrowing trade deficit will help in further containing the current account deficit, and support the rupee, which has been the best performer in Asia so far this year. BLOOMBERG

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