Quote on ICRA by Aditi Nayar, Chief Economist, ICRA Ltd
Below the Quote on ICRA by Aditi Nayar, Chief Economist, ICRA Ltd
"The YoY expansion in the merchandise exports has been magnified by the low base related to the shift in the festive calendar, as well as the commodity price inflation that has been witnessed since February 2026, with the merchandise trade deficit coming in similar to our expectations.
India’s merchandise exports surged by 45% YoY to an all-time high $49.5 billion in October 2026, amid a more-than-doubling in oil exports aided by elevated prices, and a 33.5% expansion in non-oil exports, partly on account of a low base. Merchandise imports, on the other hand, rose by a relatively slower 16.5% in the month, contained by the 63% contraction in gold imports, owing to a high base.
With this the merchandise trade deficit shot up to a 12-month high $39.9 billion in the month, printing ~35% higher than the average monthly levels seen in H1 FY2027.
ICRA expects the CAD to print at a modest 0.9% of GDP in FY2027, albeit with risks tilted to the upside. We expect a modest accretion to reserves in the fiscal, aided by the sizeable FCNR(B) deposit inflows."
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