Gold imports push India's trade deficit to record levels
- By Reuters -
- Dec 16, 2024
NEW DELHI: India’s merchandise trade deficit in November widened to a record level, led by a surge in gold imports while exports fell driven by a drop in crude oil prices, trade ministry officials said on Monday.
India’s merchandise trade deficit in November stood at $37.84 billion, according to a Reuters calculation based on export and import data.
Economists had expected the country’s November trade deficit to be $23.9 billion, according to a Reuters poll. The deficit stood at $27.14 billion in October.
India’s merchandise exports in November stood at $32.11 billion, while imports were $69.95 billion, per data. In the previous month, merchandise exports were at $39.2 billion and imports stood at $66.34 billion.
Inbound shipments of gold climbed to a record high of $14.8 billion last month, more than doubling from $7.13 billion in October, the data showed.
“Gold imports have been a major culprit in the overshoot of trade deficit, having seen nearly 50% increase year-to-date vs last year,” said Madhavi Arora, chief economist at Emkay Global Financial Services.
Both the consumption and investment demand for gold have increased, while the global price of gold has also risen materially, Arora said.
India’s merchandise exports fell in November over the previous month, but increased by 2.17% year-on-year in the April to November period, data showed.
“The merchandise exports have taken a hit mainly due to a fall in global crude prices,” Sunil Barthwal, India’s commerce secretary told reporters, while releasing the trade figures.
“We are focusing on 20 countries where the export potential is very high this year and next year,” Barthwal said, adding that six manufacturing sectors have been identified for export promotion along with six services with higher potential.
In total, merchandise and services exports were estimated at $67.79 billion in November and imports at $87.63 billion, against $73.21 billion exports and $83.33 billion in imports, respectively, in the month before.