India has recorded a trade surplus of $790 million for the month of June and this is the first monthly surplus that India has recorded in eighteen years. However, the surplus is not a positive sign as it comes on the back of a 48 percent fall in imports.
With COVID-19 triggering a demand destruction in the Indian economy, the fall in imports is across the board - in machinery, electronics, chemicals and metals. The only consolation here could be the fact that these imports may have been for orders placed in April - the worst hit month due to the complete lockdown across the country.
To analyse whether this may continue, and what it can do to the exchange rate, and RBI intervention, Indranil Pan, chief economist at IDFC FIRST Bank and Ananth Narayan, Professor at SPJIMR, discussed with CNBC-TV18.Watch this video for details