India’s Trade Deficit Widens As Gold Imports Continue To Offset Export Growth
Monthly gold imports double yet again in July.
India's trade deficit continued to widen as higher gold imports offset an eleventh straight month of export growth.
Trade deficit, the difference between imports and exports, stood at $11.9 billion in July compared to $7.7 billion in the same month last year, according to data from the Ministry of Commerce. The gap was lower than $12.9 billion in June.
Imports in July rose 15.4 percent over last year to $33.9 billion as inbound shipments of gold, silver and oil increased. Gold imports have been on the rise since February, after a slowdown during demonetisation.
The value of gold imports in July nearly doubled from last year to $2.1 billion. Silver imports went up 222 percent to $175.8 million.
Bloomberg reported that gold imports rose in July due to the arrival of delayed shipments ahead of the Goods and Services Tax. Traders and dealers had stocked up ahead of the implementation of new national tax.
Oil imports contributed $7.8 billion to India's import bill, 15 percent higher than last year. The value of the benchmark Brent crude oil went up 8.3 percent during the period.
- Imports of electronic goods in July rose 22.5 percent over July last year to $4.04 billion.
- Value of coal imports rose 52 percent to $1.5 billion.
- Iron and steel imports grew 42.7 percent to $1.3 billion.
- Imports of pearls and precious stones rose 6.8 percent to $2.2 billion.
- Electrical machinery imports rose 7.3 percent to $2.4 billion.
Exports Remain Strong
Indian exports extended their growth to the eleventh consecutive month, led by higher outbound shipments of engineering goods.
Exports in July rose 3.9 percent over last year to $22.5 billion. Engineering goods, the biggest contributor to India's export bill in July, saw shipments rise 15.1 percent to $5.8 billion.
Gems and jewellery exports fell 22.7 percent to $2.5 billion. Exports of petroleum products grew 20.2 percent to $3 billion.