India’s trade deficit widened to $18.7 billion in February even as exports hit an 11-month high of $41.4 billion. As exports grew at 11.9 per cent yoy, imports grew at a faster rate of 12.2 per cent yoy. Non-oil imports jumped nearly 18 per cent yoy, an 18-month high as gold imports was up by a significant 134 per cent yoy. On the other hand, services export hit an all-time high of $32.2 billion, up 17.3 per cent yoy.

Charts below show the trade trend and also the category-wise growth rate.

The merchandise trade deficit, which contracted sequentially in January, expanded in February despite surging exports. Gold was a key component in widening the deficit.

Surplus in services trade has been increasing steadily since May 2023. In February, the surplus stood at $16.8 billion.

Electronics led to strong growth in exports. Exports in other components like plantations, too, expanded, powered by coffee exports, which are at all-time highs. Handicrafts’ growth was due to a low base.

Considerable demand for gold and silver led to an increase in imports. On the other hand, imports of project goods saw a significant contraction in February.

Global trade volume increased, as indicated by the CPB trade volume index. After contracting in November 2023, it improved by about 1 per cent in December last year.