(Bloomberg) -- India’s trade deficit widened in July as strong domestic demand drove the nation’s import bill.
The gap between exports and imports stood at $23.5 billion in July, Trade Ministry data showed Wednesday. The reading is higher than the $21.5 billion deficit forecast by economists in a Bloomberg survey and compares with a reading of $20.98 billion in June.
The imports grew 7.5% from a year earlier to $57.48 billion in July, while exports fell 1.5% to $33.98 billion during the month. The inbound shipments were $56.18 billion in June, while outbound shipments stood at $35.20 billion.
India is the fastest-growing major economy in the world, posting growth of more than 8% in the past fiscal year. The central bank predicts expansion of more than 7% in the year through March 2025.
Gold imports stood at $3.13 billion in July, compared to $3.06 billion the previous month, while crude oil imports stood at $13.8 billion, the data showed.
India is the world’s third-largest consumer of oil and a rise in prices drove the nation’s import bill. India’s crude oil basket averaged $84.15 a barrel in July compared to $82.55 in June, according to oil ministry data. The government also slashed import duty on gold from 15% to 6% last month.
“Despite whatever is happening globally, India will perform better than last year,” Trade Secretary Sunil Barthwal told reporters in New Delhi. The nation’s growing consumption is reflected in crude oil imports, he added.
The World Trade Organization expects merchandise trade to recover during 2024 and accelerate heading into next year despite economies struggling with wars, rise of protectionism and geopolitical tensions. The Geneva-based trade body expects Asia to serve as the biggest engine of exports and imports.
A smaller trade deficit is crucial for India to keep its current account deficit at manageable levels. The gap recorded a surplus in the January-March period.
Here’s more from the briefing:
- India and Australia will hold the 10th round of trade talks from Aug. 19 to Aug. 22 in Sydney
- Trade Minister Piyush Goyal discussed next steps on UK trade pact with his counterpart last month
- Officials will discuss contours of the European Union trade agreement from Sept. 23- Sept. 27. The talks will include rules of origin, trade remedies and concerns on Carbon Border Adjustment Mechanism
--With assistance from Anup Roy.
(Updates with a chart and additional details.)
©2024 Bloomberg L.P.
