(Bloomberg) -- India’s trade deficit narrowed in July as imports declined for a second straight month, signaling a deepening economic slowdown.

The gap between exports and imports was $13.4 billion last month, compared with $15.3 billion in June, data released by the commerce ministry showed Wednesday. That was lower than the $15 billion median estimate in a Bloomberg survey of 22 economists.

Key Insights

  • Imports declined 10.4% from a year ago to $39.8 billion, compared with a 9.1% fall in June. Exports rose 2.3% to $26.3 billion as against a 9.7% drop the previous month
  • Shipments of oil, India’s top import, dropped 22.2% in July from a year earlier to $9.6 billion. The decline is in line with weak demand highlighted in Tuesday’s retail inflation data, which showed a 0.4% fall in fuel and light prices during the month
  • A global slowdown and escalating trade tensions are posing downside risks to economic activity, the Reserve Bank of India said last week as it cut economic growth forecast to 6.9% from 7% for the year ending March and slashed interest rates for a fourth time this year to spur the economy

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  • Wholesale prices rose 1.08% in July from a year earlier, data released earlier Wednesday showed. Retail inflation eased for the first time in six months, supporting the central bank’s accomodative stance
  • To read the full statement on trade numbers, click here

--With assistance from Cynthia Li and Unni Krishnan.

To contact the reporter on this story: Vrishti Beniwal in New Delhi at vbeniwal1@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Karthikeyan Sundaram, Abhay Singh

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