Exports up 25.1% to $34.57 bn in Feb; trade deficit widens to $20.88 bn

India's exports rose by 25.1 per cent to USD 34.57 billion in February, fuelled by higher shipments of engineering, petroleum and chemicals goods even as the trade deficit widened to USD 20.88 billion, according to the commerce ministry data released on Monday.

Imports during the month too jumped 36 per cent to USD 55.45 billion, with inbound shipments of petroleum and crude oil surging 69 per cent to USD 15.28 billion.

Trade deficit -- the difference between imports and exports -- stood at USD 13.12 billion in February 2021.

"Merchandise exports for the period April-February 2021-22 was USD 374.81 billion as against USD 256.55 billion during the period April-February 2020-21, registering a positive growth of 46.09 per cent," the ministry said.

Imports during the 11-month period rose 59.33 per cent to USD 550.56 billion. Trade deficit during this period widened to USD 175.75 billion as against USD 88.99 billion during April-February 2020-21.

According to the data, gold imports in February dipped by 9.65 per cent to USD 4.8 billion. Imports of electronic goods rose about 29.53 per cent to USD 6.27 billion.

Exports of engineering goods, petroleum and chemicals in February increased by 32 per cent, 88.14 per cent and 25.38 per cent to USD 9.32 billion, USD 4.64 billion and USD 2.4 billion, respectively.

Pharmaceutical exports, however, slipped by 1.78 per cent to USD 1.96 billion in February.

Commenting on the figures, ICRA Ltd Chief Economist Aditi Nayar said that while higher commodity prices will inflame imports in March 2022, the volume of oil imports will play a key role in determining the size of the trade deficit.

"We expect the trade deficit to remain higher than USD 20 billion in the ongoing month," she said, adding the increase in merchandise exports in February 2022 relative to the year-ago level was chiefly propelled by engineering goods and petroleum products.

Benefitting from higher commodity prices and bouts of global optimism, India's merchandise exports are set to print around USD 410 billion in this fiscal, Nayar said.

"With the sharp rise in the trade deficit, we expect the current account deficit to have crossed 3 per cent in Q3 FY'2022, for the first time since the June 2013 quarter, before receding somewhat in the ongoing quarter.

"For FY'2023, we project the current account deficit at 2.8 per cent of GDP if the crude oil price averages at USD 115/barrel, the likelihood of which will crucially depend on the duration of the geopolitical tensions," she added.