In September, trade deficit widened to ~USD18bn, much higher than its normal range (~USD14-15bn), largely on account of jump in imports (both oil and non-oil). The rise, especially in oil imports, is a concern, although (as of now) it is just a one month phenomenon, and hence data in coming months needs to be monitored carefully. As regards exports, September data and future outlook are weak given the frail external environment. In our view, the current spike is not sustainable and hence trade data will revert to its normal trend in the coming months as there has been no significant uptick in oil demand or prices in recent months.
Regards,
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