India's Trade Deficit Expands to $28.4 Billion in April Amid Strong Exports Growth

India's Trade Deficit Widens to $28.38 Billion in April

India's trade deficit has widened to $28.38 billion in April, compared to $20.67 billion in the previous month. This increase is attributed to a rise in both imports and exports. Merchandise exports came in at $43.56 billion in April, up from $38.92 billion in March, while imports stood at $71.94 billion, compared to $59.59 billion in the previous month.

Key Drivers of Exports Identified by Commerce Ministry

According to the commerce ministry, merchandise exports grew over 13 percent in April on a year-on-year basis, marking one of the highest monthly figures in the last 10 years. Electronics, petroleum, and poultry were identified as the key drivers of exports. However, exports to West Asia recorded a fall of 28 percent on-year in April. This decline was mirrored in imports from West Asia, which slipped 30 percent in April compared to the year-ago period.

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Impact of Oil Price Rise and Import Duties on Trade

The rise in oil prices is unlikely to affect India's export competitiveness, according to Commerce Secretary Rajesh Agrawal. This is because the increase is a Most Favoured Nation (MFN) increase that impacts globally. However, the high import duty on gold and silver is expected to have an impact on inbound shipments. Gold imports in April stood at $5.63 billion. Agrawal noted that the impact of the duty hike may be slightly less, but consumption-based usage of gold is expected to decrease due to the duty hike.