The trade deficit touched a record high of $31.46 billion in October as gold imports surged on account of festive demands, government data released on Wednesday showed. Meanwhile, India‘s merchandise exports rose 6.21 per cent to $33.57 billion in October.
Imports increased by 12.3 per cent to $65.03 billion in October, with gold imports rising to $7.23 billion, which is almost double compared to last October. Oil imports also increased by 8 per cent to $17.66 billion during the month. A trade deficit means more imports than exports, and it impacts the current account deficit, which, in turn, affects currency.
The country’s trade deficit in goods in October last year stood at $26.31 billion. “The deficit in October is the ‘highest’ because of the largest import figures,” Additional Secretary in the Commerce Ministry L Satya Srinivas told media here. Meanwhile, Commerce Secretary Sunil Barthwal said that the trade numbers in October reflect ‘green shoots’ of recovery in outbound shipments. “I am hopeful that we will be crossing last year’s figures,” he said, adding that positive growth is there despite a fall in commodity prices, “but we are waiting and watching” the global situation.
The country’s exports were in a negative zone during February–July. After a revision of the numbers by the ministry, the shipments showed 3.88 per cent positive growth in August, but in September they contracted by 2.6 per cent. Imports have turned positive after ten months of negative growth between December 2022 and September 2023.
Cumulatively, exports during the April-October period this fiscal contracted by 7 per cent to $244.89 billion, while imports fell 8.95 per cent to $391.96 billion. The trade deficit during the seven-month period was $147.07 billion, compared to $167.14 billion in the corresponding period last year. Gold imports during the period rose 23 per cent to $29.5 billion, while crude oil imports dipped by 18.72 per cent to about $100 billion during April–October this fiscal.
Further, as per the data, service exports in October were estimated at $28.7 billion, compared to $25.3 billion a year ago. Imports stood at $14.32 billion against $13.51 billion. The estimated value of services exported in April–October 2023 was $192.65 billion, compared to $181.37 billion in April–October 2022.