India's Record Merchandise Trade Deficit in November

NEW DELHI (Reuters) – India's merchandise trade deficit in November widened to a record level, driven by a surge in gold imports while exports decreased due to lower crude oil prices, trade ministry officials reported on Monday.

India's merchandise trade deficit for November reached $37.84 billion, based on calculations from export and import data.

Economists had predicted the trade deficit for November to be $23.9 billion, according to a Reuters poll. The previous month's deficit was $27.14 billion.

Merchandise exports in November amounted to $32.11 billion, while imports totaled $69.95 billion. In October, exports stood at $39.2 billion, and imports were $66.34 billion.

Gold imports surged to a record high of $14.8 billion last month, more than doubling from $7.13 billion in October. Madhavi Arora, chief economist at Emkay Global Financial Services, highlighted that gold imports significantly contributed to the trade deficit, with a nearly 50% increase year-to-date compared to last year.

Both consumption and investment demand for gold increased, alongside a notable rise in global gold prices, according to Arora.

India's merchandise exports fell in November compared to the previous month but exhibited a 2.17% year-on-year increase from April to November.

Commerce Secretary Sunil Barthwal stated that the decline in merchandise exports was primarily due to falling global crude prices. He added that India is focusing on 20 countries with high export potential this year and the next, identifying six manufacturing sectors and six services for export promotion.

Overall, merchandise and services exports in November were estimated at $67.79 billion, with imports at $87.63 billion, compared to $73.21 billion in exports and $83.33 billion in imports the previous month.