India's April trade deficit rises to $19B on lower exports
India's merchandise trade deficit has expanded to $19.1 billion in April, as reported by Commerce Secretary Sunil Barthwal. This figure surpasses the $17.23 billion deficit predicted by a Reuters poll of economists. The trade deficit had previously contracted to an 11-month low of $15.6 billion in March, indicating a significant increase within a month.
Imports and exports show varied growth in April
Merchandise exports saw a slight increase of 1.06% on an annual basis, reaching $34.99 billion. However, imports experienced a more significant growth of 10.3% year-on-year, amounting to $54.09 billion. In March, merchandise exports were $41.68 billion, while imports stood at $57.28 billion. Barthwal expressed optimism about the trade growth in the current fiscal year, stating "Goods exports in April have gone up."
Surge in gold and oil imports contributes to deficit
The surge in the import bill was primarily due to increased inbound shipments of gold, petroleum products, electronics, and pulses. In April alone, oil imports amounted to $16.46 billion while gold imports more than doubled from March's $1.53 billion to reach $3.11 billion in April. Barthwal commented on this trend saying, "Gold imports are well within the average trend. It is not an exception."
Gold prices and foreign reserves reflect global trends
Barthwal further explained that "Most of the central banks are buying gold because of conflicts. Gold prices have increased and in terms of value imports are appearing to be high." This trend is reflected in India's foreign reserves where the proportion of gold holdings rose from 7.37% at the end of September to 8.15% by the end of March.
