In fact, the exim trade has been balancing through 2019 due to the worsening growth momentum.
Following the nationwide lockdown since March 25, and the full of April, both exports and imports plummeted to all-time lows in April.
Given the near complete closure of the ports, exports plunged by 60 per cent in the month, while imports collapsed by 59 per cent in April, resulting in the smallest monthly trade deficit in four years.
"We expect merchandise trade deficit to continue to narrow and forecast a shortfall of just $ 103 billion or 3.7 per cent of GDP in FY2020-21, relative to a trade deficit of 5.3 per cent of GDP in FY2019-20," the report said.
In fact, the steadily slowing economy has ensured that imports are also falling along with exports, leading to improvements in external position since the first half of FY19, with the current account deficit narrowing to $ 27 billion in FY2019 from $ 66 billion in FY2018, driven largely by a smaller trade deficit.
"Our current account tracker points to a small current account deficit of $ 3 billion in Q1, followed by successive 'unwelcome' surpluses, mirroring subdued economic activity. Given this, we raise our account surplus forecast to $ 19.6 billion or 0.7 percent of GDP for FY21, up from $ 10 billion previously forecast," Barclays said.
It also forecasts $ 8 billion in current account surplus in the second quarter of FY2021, the first since the first quarter of FY2007.
Explaining the 'unwelcome surplus' the report says it is an unwelcome development as the surplus will be driven almost entirely by the lockdown of the economy to contain the pandemic outbreak, and helped by the plunge in crude prices and not by excess exports earnings over imports.
The report further noted that while low crude prices are serving as a tailwind for the economy, the bigger impact on the current account balance will come from lower demand for both oil and non-oil imports.
But some of these gains will be lost due to the pandemic-induced hits to service exports to the pandemic-ravaged the US and the Middle East, as well as well as remittance inflows, warns the report.
The report also expects the rising tide of capital outflows seen since March after a record surge earlier to stabilise in the second quarter of FY2021, but result in only a modest capital account surplus.
"But we still expect an overall balance of payments surplus of about $ 38 billion in FY21," says the report, adding another plus point is the surging forex reserves which are set to scale past the $ 500-billion-market by the end of the fiscal, from $ 486 billion now.
The central bank has absorbed a large amount of inflows and accumulated $ 51 billion in forex reserves between end-September 2019 and April 2020.
The country's goods trade position has been improving since mid-2019, with the deficit steadily narrowing to $ 6.8 billion in April 2020. In 2019, the trend of exports growing marginally faster than imports resulted in a structural decline in the goods trade deficit.
Oil consumption eased in March and collapsed in April, falling to 55 per cent of the past year's average, and pulled down oil refiners' capacity by 50 per cent.
Also, gold import bill has shrunk despite higher gold prices, with imports falling to $ 3 million in April from $ 1.2 billion in March - pulling down non-oil, non-gold imports (core imports) by 52 per cent in April.