NEW DELHI: Merchandise trade deficit expanded to a record high at $31.46 billion in October, driven by a increase in gold imports during the festive season and a rise in oil prices.
Official data released by the Ministry of Commerce and Industry revealed imports in October stood at $65.03 billion, while exports at $33.57 billion.
On a year-on-year (YoY) basis, there has been nearly 20% rise in trade deficit. In October 2022, it was at $26.31 billion, with imports at $57.91 billion and exports at $31.60 billion. Interestingly, in September 2023, the trade deficit was significantly lower at $19.37 billion, with merchandise exports at $34.47 billion, and imports at $53.84 billion.
According to Satya Srinivas, additional secretary at Department of Commerce, the large trade deficit was on account of a 95% YoY increase in gold imports during October, during Diwali festival. Gold imports was at $7.23 billion for the month. Commerce secretary Sunil Barthwal said the disparity in dates between Diwali celebrations in October this year and November last year contributed to the surge in gold imports in 2023.
Despite falling commodity prices, Barthwal expressed optimism about stabilising “green shoots”, which bodes well for India’s exports. Brent crude prices during October rose to $92.63 per barrel, up from $89.00 per barrel in the same period last year.