The December 2013 trade deficit for India came in at USD 10.14 billion versus USD 17.19 billion in the same month last year.
The reduction was driven by a 15.25 percent fall in imports, which came in at USD 36.49 percent while exports grew at 3.5 percent to USD 26.35 billion.
Economists were expecting the deficit to come at a range of USD 9 billion-USD 10.5 billion.
The fall in imports was led by a decline in gold and silver imports, which fell 68.83 percent to USD 1.7 billion.
Export growth, however, was lower than what many analysts had expected. This, the government said, was due to a slowdown in petroleum products exports on account of a shutdown at Reliance Industries’ Jamnagar refinery. Product shipments are now coming back to normal in January.
The trade deficit has now become less of a concern for economists now, halving from a peak of about USD 20 billion recorded in January and May last year. “Given today’s trade data, we revise our fourth-quarter current-account projection to a deficit of USD 8.0 billion (1.7 percent of GDP) from USD 10 billion earlier,” Barclays said in a note.
“While it is a modest deterioration from the third quarter (USD 5.1 billion deficit), it still is a significant improvement on the recent trend of current account balances.”
The brokerage firm said it was maintaining its full year FY14 current account deficit forecast of USD 48 billion (2.6 percent of GDP), which would be markedly lower than the USD 88 billion (4.8 percent of GDP) deficit in FY13.
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