India’s trade continues to show two very distinct signals. First, that the deficit is down. Look at the merchandise trade stats for June 2015: the deficit is just $10 billion, which is about as low as it has been in the last few months.


Imports are lower both due to lower crude oil imports (due to the lower crude prices, not lower consumption) and lower gold imports (which is both due to lower gold prices and lower consumption). Gold imports are down 37% from last year (DNA) and in volume terms has fallen from 221 tonnes for the AMJ quarter 2014 to 203 tonnes in 2015. (Hindu)

This is great for the current account, where gold has been the make-or-break for us. If you take away gold imports, we actually are a surplus on the current account!

The Bad Part: Trade Volumes In The Toilet

But wait. Not only have imports dropped, exports, too have fallen off a cliff. Total trade (imports plus exports) is down a huge amount, about 14% lower than last year.


And exports and imports are both down more than 13% from last year:


Non-Oil Import Contraction for Second Successive month


Gold imports were lower by $1.2 billion which contributed to the $500 million drop in Non-Oil imports. But that means that net of Gold, non-oil imports grew by only $700 million which is a low 1.5% growth. If this is “Make in India” working out that would be different but from any data we see, Make in India is not really working on a macro scale. It’s more indicative of a slowdown.

The upside of seeing data so bad is that we can only improve from here. Apparently, markets think so too, they are now within 5% of their all time highs.

Now, tell them about it: