Source: Economic Times

The trade deficit for May 2015 came at $10.4bn, slightly lower than Apr 2015. Exports and imports continued to contract, respectively, 20.2% and 16.5%. Low crude prices and poor global growth have shrunk exports, even as the lagging impact of low crude prices kept our import bill low. Import growth would be fueled by the appetite for gold and the upward trajectory of crude prices.

1) Exports continue to slide

May 2015 exports contracted 20%. In the past four months, exports have averaged a 17.3% contraction. The lagged impact of low oil prices is visible in the shrunken figures.

2) Imports, too, in the negative

May 2015 imports shrunk 16.5% (vs. Apr 2015s 7.5% fall). For the past six months imports have been in the negative.

3) Oil imports in single digits

For the fifth month running, oil imports held in single digits. For May 2015 the oil import bill came at $8.5bn (firming up from the Apr 2015 figure of $7.4bn).

4) Non-oil growth turns negative

In May 2015 non-oil imports turned negative (-2.2%) for the first time since Aug 2014. This stemmed from the fall in the absolute figure, supported by an unfavourable base. Gold imports, too, in May 2015 were at a three-month low of $2.4bn.

5) Trade-deficit figures stabilising

The May15 trade deficit improved to $10.4bn (a three-month-low). The Apr-May15 trade deficit exactly mirrors the year-ago (Apr-May14) figures. The soft merchandise trade figures helped contain the Q4 FY15 CAD to $1.5bn (0.3% of GDP).

6) Services trade surplus continues falling

Services trade data showed that the trade surplus slipped to $5.7bn in Apr15 (vs. $6.2bn in Mar 2015). The Apr 2015 figure slid to an eight-month-low.