NEW DELHI (Reuters) -India’s merchandise trade deficit widened to a 13-month high of $32.15 billion in September, driven by a surge in gold and silver imports and a drop in exports to the U.S. following Donald Trump’s up to 50% tariffs on Indian goods, data showed on Wednesday.
The deficit was higher than economists’ forecast of $25.13 billion in a Reuters poll. India’s trade deficit stood at $34.03 billion in August 2024.
The first half of the current fiscal year has seen India’s merchandise trade deficit widen to nearly $10 billion higher than the same period a year earlier.
A wider trade deficit could impact India’s current account balance and add to pressure on the local currency, which has been teetering around record lows against the dollar.
The September data, which reflects shipments in the first full month when India faced steep tariffs on exports to the U.S., lands ahead of a new round of trade talks scheduled with Washington this week. India is promising to increase U.S. energy imports, aiming to address concern over its Russian oil purchases.
Merchandise exports in September rose to $36.38 billion from $35.10 billion in August, Commerce Ministry data showed.
However, exports to the U.S. fell to $5.43 billion from $6.87 billion in August, with U.S. tariffs hitting shipments of goods such as textiles, shrimp, and gems and jewellery. Imports from the U.S. rose to $3.98 billion from $3.6 billion in the previous month.
“Despite turbulence in the global market, our exports have maintained momentum,” said Commerce Secretary Rajesh Agrawal, “But the imports have grown at faster pace in September, driven by increase in gold, silver, fertilisers and electronics.”
He added that the surge in gold demand was ahead of the festival season.
Goods imports rose to $68.53 billion in September from $61.59 billion in the previous month, according to the data.
Gold imports surged to $9.6 billion from $5.14 billion in the previous month, aided by strong demand for physically-backed gold exchange traded funds amid weak stock market returns.
Crude oil imports rose to $14 billion in September from $13.2 billion in August.
The government estimated services exports in September at $30.82 billion and imports at $15.29 billion, suggesting a total goods and services trade surplus at $15.53 billion.
India’s central bank releases monthly services trade data after a one-month lag, following government estimates.
In the April-September period, India’s goods exports rose to $220.12 billion from $213.68 billion a year earlier, while imports climbed to $375.11 billion from $358.85 billion.
(Reporting by Manoj Kumar and Nikunj Ohri; Editing by Mrigank Dhaniwala and Ronojoy Mazumdar)
