October trade deficit narrows to lowest in eight months

MUMBAI: India’s trade deficit narrowed in October to its lowest since March, largely due to low gold imports and a faint pickup in non-oil exports (particularly textiles and pharmaceuticals).

Meanwhile, non-oil-non-gold imports (NONG) rose further although the pace of sequential growth softened a tad. Interestingly, the recent improvement in NONG imports is skewed more towards consumer goods like transport equipment and electronics, than investment related project goods or machine tools, reflecting the mix in India's growth recovery.

"Trade data supports our benign outlook on the external balance. We expect the CAD to be contained at 1 per cent of GDP this year and be fully funded by FDI flows," HSBC said in its report.