India’s Trade Deficit Narrows As Gold Imports Fall After Seven Months
Indian export growth outperforms import growth as inbound gold shipments fall.
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India’s export growth outperformed the rise of imports in September as inbound shipments of gold which had inflated the import bill fell for the first time since January.
Trade deficit, the gap between exports and imports, stood 0.9 percent lower at $8.9 billion compared to the same month last year, according to data released by the Ministry of Commerce. The trade deficit stood at $11.6 billion in August.
Imports of the yellow metal has been rising since February, first due to festive demand and later as traders stocked up on uncertainties ahead of the implementation of the Goods and Services Tax.
The demand for gold was expected to slow down in the second half of 2017 as buyers take time to transition to the new tax, according to the World Gold Council. Consumption is estimated to remain below a five-year average, it said. Rising gold prices, as investors flock to safe havens due to tensions between the U.S. and North Korea, have also dampened demand for gold ahead of Diwali in India, Bloomberg reported last month.
Total imports rose 18 percent over last year to $37.5 billion, driven by an 18.4 percent jump in the value of oil imports, the biggest contributor to India’s import bill. The global benchmark Brent crude prices jumped 19.4 percent in the same period.
Non-oil imports rose 18 percent to $29.4 billion, reflecting underlying domestic demand ahead of the festive season.
Import Highlights
- Pearl, precious and semi-previous stone imports rose 56.9 percent over last year to $3.1 billion
- Iron and steel imports rose 34.9 percent to $1.2 billion
- Electronic goods imports continued rising sharply at 40.9 percent to $5.1 billion
- Coal imports rose 48 percent to $1.6 billion
Exports grew for the fourteenth straight month, climbing 25.6 percent to $28.6 billion on a year-on-year basis. The growth was led by a 44.2 percent rise in the value of outbound engineering goods shipments to $7.3 billion.
Export Highlights
- Readymade textile garment exports went up 29.4 percent to $1.6 billion
- Gems and jewellery exports rose 7.1 percent to $4.7 billion
- Value of organic and inorganic chemical exports went up 46 percent to $1.6 billion
- Petroleum product exports grew 29.6 percent to $3.5 billion
- Drugs and pharmaceutical exports stood 14.6 percent higher at $1.59 billion