India’s trade deficit narrowed to $12 billion in February, its lowest in five months, amid concern that a global trade war could hit its exports because of U.S. President Donald Trump’s decision to hike import taxes on steel and aluminum.
India’s merchandise exports are expected to touch $300 billion in the current fiscal year ending this month compared with $275.8 billion, mainly driven by a rise in commodity prices and strong demand in the US and Europe.
The country’s imports last month grew 10.4 per cent to $37.8 billion, as compared to the $34.2 billion worth of imports in February 2017.
“Exports have been on a positive trajectory since August 2016 to February 2018 except for a temporary setback in October 2017,” a ministry statement said.
“Global Brent prices ($/barrel) have increased by 17.90 per cent in February 2018 vis-à-vis February 2017 as per World Bank commodity price data,” the statement said.
Instead, the positive trade balance in services rose to a 25-month high of $6.5 billion in January 2018, according to Reserve Bank of India (RBI) data. Services exports during the month at $16.3 billion outpaced imports of $9.8 billion.
Announcing the trade figures earlier in the day, Commerce Secretary Rita Teaotia said the government is looking at a 6.5 per cent export growth over the coming fiscal.