Trade deficit widens
INDIA’S trade deficit widened to 35-month high of $14.02 billion in October as exports on-year dropped for the first time since July 2016, the government data showed on Tuesday. In September, the trade deficit was $8.98 billion.
“Although the merchandise trade deficit flared up in October, it may not be a source of alarm, as the average trade deficit for SeptemberOctober is in line with the trend in July and August,” said Aditi Nayar, principal economist at Icra.
Imports increased at a faster pace to $34.49 billion in October against $34.49 billion same month a year ago, while exports fell to $23.09 billion in October against $28.61 billion in September and $23.36 billion same month a year ago.
The contraction in merchandise exports in October partly reflects an unfavourable base effect, as well as up fronting of shipments to September, with gems & jewellery and textiles underpinning the contraction. Gems and jewellery exports fell to $3.31 billion in October from $4.78 billion in September. But gold imports increased to $2.94 billion in October against $1.71 billion in September and $3.50 billion same month a year ago. Exports of engineering goods fell to $5.92 billion against $7.33 billion in September. India, world’s third largest consumer of crude oil, imports 82 per cent of its requirements and net oil imports stood at $92.86 billion against $8.18 billion in September, 27.89 per cent higher than oil imports valued at $72.61 billion in October 2016.
Imports of pulses stood at $238.41 million in October against $364.3 million in September. Silver imports increased to $346.7 million in October compared with $317.95 million in September and $181.93 billion, up 90.62 per cent same month a year ago. Meanwhile, petroleum products dropped to $3.19 billion October against $3.6 in September.
Gems and jewellery exports fell to $3.31 billion in October from $4.78 billion in September