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India: Trade deficit widens on surging imports of gold

October 15, 2014

The trade deficit totaled USD 14.2 billion in September, which was well below the USD 6.1 billion shortfall registered in the same month last year. In the 12-months up to September, the trade deficit totaled USD 128.7 billion, which was greater than the USD 120.6 billion shortfall seen in the 12 months up to August and touched a level not seen in six months.

The increase in the trade deficit was the result of a notable surge in imports. Merchandise imports expanded 26.0% in September over the same month last year, which was well above the 2.1% increase tallied in August and market expectations of a 9.5% rise. The steep rebound in imports was broad-based, but was particularly felt in gold imports, which skyrocketed 450% annually in September. Gold imports surged in September amid falling prices for the precious metal and due to the coming Diwali festival. The government introduced gold imports controls last year to curb a widening in the current account deficit. Meanwhile, growth in overseas sales picked up from 2.4% in August to 2.7% in September.

FocusEconomics Consensus Forecast panelists expect exports to increase 8.6% in FY 2014/2015, reaching USD 340 billion. In FY 2015/2016, the panel sees exports expanding 11.6% and reaching USD 379 billion.


Author:, Senior Economist

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India Trade Chart


India Trade12m September 2014

Note: 12-month sum of trade balance in USD billion and annual variation of the 12-sum of exports and imports in %.
Source: Ministry of Commerce and Industry and FocusEconomics calculations.


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