New Delhi: India’s trade deficit has surged to a record $37.8 billion in November, primarily driven by an unprecedented rise in gold imports and a decline in exports, according to data released by the commerce department.
The country’s imports surged 27% to an all-time high of nearly $70 billion, with gold shipments quadrupling to $14.9 billion, making it the second-largest import item after petroleum. The commerce ministry attributed the surge in gold imports to a significant increase in global prices and its safe-haven status amidst volatile stock markets.
Imports of various other commodities also witnessed significant growth, including electronic products (up 17.4%), petroleum products (7.9%), electrical machinery (12.8%), chemicals (6.5%), and vegetable oil, which saw a staggering 87.8% increase, Business Standard reported.
Also read: Domestic Tractor Sales Decline in November, Exports Lowest For Present Year
The widening trade deficit has raised concerns about its impact on India’s current account deficit (CAD) and the value of the rupee. Economists predict that the current account deficit could widen to 1.4% of GDP, up from the earlier estimate of 1%.
“The adverse trade deficit print for November 2024 will result in a sharper-than-expected widening in India’s CAD in Q3FY25 to 2.8% of GDP as against earlier expectations of 2%, which will be the highest level in over two years. We have also revised our FY25 forecast for CAD to 1.4% of GDP from 1% earlier,” Aditi Nayar, chief economist and head of research and outreach at ICRA was quoted as saying by BS.
Between April and November, India’s cumulative exports rose 2.2% to $284.31 billion, while imports during the same period grew 8.3% to $486.73 billion, marking a significant trade imbalance in the first eight months of FY25.
