Trade deficit for December narrowed to USD 10.37 billion compared to USD 13 billion in November. For the April to December period trade deficit totals to USD 76.55 billion, roughly 23 percent decline from USD 100.08 billion in the same period last year.
Exports in December rose for the fourth straight month with 19 percent month-on-month gains at USD 23.88 billion, the highest level since March 2015.
Gold imports for December slumped to USD 1.96 billion from USD 4.36 in November largely due to the impact of demonetisation. This drop led overall imports to remain contained at USD 34.25 billion compared to USD 33.02 billion in November, but still at the highest levels since July 2015.
In November, gold imports had seen 23.24 percent rise which had pushed the trade deficit to a two-year high.
Among other categories, oil imports saw roughly 12 percent MoM jump to USD 7.65 billion, while non-oil imports were at USD 26.61 billion versus USD 26.18 billion last month.
Iron & Steel imports saw a fairly large increase of 29 percent MoM to USD 1.2 billion while electronic goods imports increased 13 percent MoM to 3.99 billion.
Exports of Gems, Jewellery firmed up MoM to USD 3.2 billion from USD 2.53 billion
while Engineering Goods also grew to USD 5.85 billion from USD 4.96.
Commenting on the numbers, Rupa Rege Nitsure, Group Chief Economist at L&T Finance Holdings, said exports, in particular, have pleasantly surprised considering demonetisation was expected to hit exporters hard.
She firmly believes that if the country aims for good growth then it is imperative that higher current account deficit be tolerated.
Watch video for more....