NEW DELHI: India’s merchandise trade deficit widened to USD30.21 billion in September as the rise in imports outpaced that in exports, though a rise in outbound shipments and trade deals could narrow the balance over coming months.
The trade gap has widened as Asia’s third-largest economy grapples with a prolonged Iran war that has made energy costlier, hurt shipments to the Middle East and battered markets.
India raised interest rates earlier this month and announced a raft of measures to support the rupee. India’s trade deficit stood at USD26.86 billion in August.
Merchandise exports rose to USD44.40 billion in September from USD43.81 billion in the previous month, while imports increased to USD74.61 billion from USD70.67 billion. Export growth was broad-based, reflecting strength across sectors including petroleum products, meat, dairy, poultry, electronic goods, handicrafts, and engineering goods, Trade Secretary Rajesh Agrawal told reporters.
India is seeking to diversify its export markets, with a trade deal with New Zealand set to take effect next week and its pact with the UK already in force, while a broader agreement with the EU is moving towards implementation.
Agrawal said negotiations with the US were moving in the “right direction,” with legal work underway. “We anticipate concluding and signing the trade deal at the earliest possible time,” Agrawal said, adding that India was seeking preferential market access and greater tariff stability under the proposed agreement.
Ties with the US have been rocky this past year over issues including President Donald Trump’s repeated claim of brokering an India-Pakistan ceasefire and a US military attack on a ship off Oman that killed three Indian seafarers.
The US remained the top destination for Indian exports, with goods shipments rising to USD50.81 billion in April-September from USD45.82 billion a year earlier.
India’s services exports stood at USD36.35 billion in September, and imports at USD19.44 billion, trade ministry estimates showed. Overall goods and services exports rose 13.84 percent year-on-year to USD476.20 billion in April-September from a year earlier, while imports increased 15.68 percent to USD551.13 billion, data showed.