Goods trade deficit swells to 10-month high in Aug

India’s merchandise trade gap swelled to the highest in 10 months in August as exports continued to slow due to weak demand in the West and China, even as sustained geo-political tensions keep inflation and interest rates elevated.

- Ravi Dutta Mishra

Commerce ministry data showed on Friday that exports slipped nearly 7% to $34.48 billion in August from $37.02 billion a year earlier. Meanwhile, imports declined to $58.64 billion from $61.88 billion last year, leaving the trade balance at $24.16 billion.

Exporters expressed worry over the plunge in shipments of gems and jewellery, and organic and inorganic chemicals, that fell 22% and 18% respectively. Easing global fuel prices impacted earnings from refined petroleum exports, resulting in a sharp 30% drop. Cereal exports also fell over 40% due to export restrictions to arrest domestic prices.