MUFG’s Michael Wan reviews India’s March trade data, noting a narrower overall deficit helped by seasonal factors and lower Gold prices and imports. He stresses that the details already show a hit to India’s growth via weaker energy and petroleum imports, especially Liquified Petroleum Gas, and sharply lower exports to Saudi Arabia and the United Arab Emirates.

Trade data reveal conflict impact

"Meanwhile, India released its trade data for March which provided an interesting read on the impact of the Middle East conflict on the economy."

"While the overall trade deficit moderated to US$20bn, this was in part due to seasonal effects, but also driven by lower gold prices and imports."

"The details suggested an important hit to India’s growth already seen in the 1st month, both through lower imports of energy and petroleum volumes and in particular Liquified Petroleum Gas, while exports to some Middle East countries where we have data moderated meaningfully."

"In particular, India’s exports to Saudi Arabia fell 46%yoy while exports to the United Arab Emirates fell 62%yoy."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)