Benign trade deficit masks manufacturing export weakness in India

The trade deficit remained expectedly benign in November, printing at US$9.8bn, the same level as in October, and a shade below expectations. The anticipated rise in gold imports played out, with gold and silver imports jumping to US$3.8bn in November from US$2bn in October. However, partially offsetting the gold increase, oil imports fell as expected-reflecting lower prices in November. 

However the main news from an otherwise unremarkable report was the weakness of manufacturing exports. After doubledigit declines in 3Q15, there were some signs of stabilization with the manufacturing export contraction easing to 5.8%oya. However, November came as a rude shock with manufacturing export values declining 6.7%m/m, sa, pulling the annual contraction to 18.2%oya.