India’s Trade Deficit and Imports Rise

• India’s goods exports fell 9.32% to $34.71 billion in August, while imports rose 3.3% to an all-time high of $64.36 billion.
• A doubling in gold imports to a record $10.1 billion boosted the import bill to $64.36 billion.
• The trade deficit widened to a 10-month high of $29.65 billion, the second-highest monthly gap in merchandise trade.
• Commerce Secretary Sunil Barthwal defended the trade deficit, stating it shouldn’t be a concern for a developing economy with high growth.
• Factors contributing to the surge in gold imports include the recent reduction in import duty, the dip in global gold prices, and jewellers stocking up for festive and wedding season.
• The merchandise trade deficit could widen the current account deficit to 1.5-2% of GDP in the current quarter.