India’s Trade Deficit Widens To $26.91 Billion In October

India’s merchandise trade deficit widened to $26.91 billion in October as exports contracted by 16.65 per cent to $29.78 billion as compared to $35.4 billion in September, according to data released by the Ministry of Commerce & Industry on Tuesday. Imports increased to $56.69 billion in October compared to $61.16 billion in the previous month.

As per the data, exports recorded a growth of 12.55 per cent to $263.35 billion during April-October, while imports rose 33.12 per cent to $436.81 billion.

India recorded a lower trade deficit of $26.72 billion in September as compared to $28.68 billion in August. However, it had increased to over $4 billion compared to $22.47 billion in September 2021. In the first half of FY22, the deficit was $149.47 billion, nearly double compared with the $76.25 billion deficit in the subsequent period last year.

The exports were 15.54 per cent higher at $229.05 billion in April-September compared with $198.25 billion in the first six months of FY22. The imports had also risen 37.89 per cent to $378.5 billion in the first half of FY23 from $274.5 billion in the first half of FY22

Commerce Secretary Sunil Barthwal in a media briefing said that global headwinds are impacting consumption worldwide and it would have an impact on India’s exports as well. India’s share in global merchandise trade is 1.8 per cent and in global services, it is 4 per cent, and there is a lot of potentials to increase this.

It was projected by the World Trade Organisation (WTO) that global trade growth will rise by 3.5 per cent in 2022, while it will increase by only 1 per cent in 2023.

Emphasising that the tightening monetary policy in the US and Europe is impacting demand globally, the secretary said, “We should not be depressed by the WTO forecast.” He also added that a lot of India’s exports have imported inputs like pharmaceuticals and there are also some seasonal effects on trade.

Gems and jewellery (21.56 per cent), engineering (21.26 per cent), petroleum products (11.28 per cent), ready-made garments of all textiles (21.16 per cent), chemicals (16.44 per cent), pharma (9.24 per cent), marine products (10.83 per cent), and leather (5.84 per cent) were among the sectors that recorded negative growth.

In October, sectors like oil seeds (78.00 per cent), oil meals(64.64 per cent), electronic goods(37.62 per cent), tobacco (20.40  per cent), tea (11.49 per cent), and rice (1.69 per cent) saw positive growth.

Oil imports increased by 29.1 per cent to $15.8 billion. However, gold imports were down by 27.47 per cent to $3.7 billion in October.