India's $40 billion trade deficit raises concerns, but Axis Bank sees limited pressure on rupee. Here's why
India's merchandise trade deficit widened to $40 billion in October, raising concerns about pressure on the rupee. However, Axis Bank Research believes strong services earnings, returning foreign investments and easing oil prices could help contain external risks.
India’s October exports rose 29.9% to $89.99 billion, according to Hindustan Times and The Hindu, which reported that the trade deficit narrowed to $20.09 billion. Prokerala separately put merchandise exports at a record $49.47 billion, while BusinessLine and mint reported a merchandise trade deficit of $39.88 billion, a one-year high. India Times said five sectors drove 83% of the merchandise export increase, with their exports up 59.4% to $34.37 billion. The reports give different export and deficit figures and do not explain the difference in their coverage.
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