India's Merchandise Trade Deficit Widens To All-Time High Of $37.8 Billion In November

India's merchandise trade deficit widened to a record high in November, led by a jump in gold imports.

In absolute terms, the trade gap widened to $37.8 billion in November, compared to $27.1 billion in October, according to a press briefing by the Ministry of Commerce and Industry on Monday.

• November exports fell by 4.9% year-on-year to $32.1 billion.

• November imports rose 27% year-on-year to $69.95 billion.

An unprecedented fall in the price of petroleum products has led to a decline in merchandise exports, with petroleum prices impacting export growth, Commerce Secretary Sunil Barthwal said at a press briefing.

Gold worth $14.8 billion was imported in November. The festive/wedding demand, asset diversification towards gold amid global uncertainties, increasing demand from banks, and reduction in custom duty from 15% to 6% were among the major reasons for this, said L Satya Srinivas, additional secretary at the Ministry of Commerce.

Non-petroleum exports grew by 7.8% to $28.4 billion, compared to $26.4 billion a year ago. Overall, trade continued to grow, led by services exports, which rose by 26.9% to $35.7 billion in November, according to tentative figures by the ministry.

• Exports of engineering goods stood at $8.9 billion, 13.8% lower year-on-year.

• Petroleum product exports were at $3.7 billion, 49.7% lower than a year earlier.

• Gems and jewellery exports were at $2.1 billion, 26.3% lower on an annual basis.

• Organic and inorganic chemical exports were at $2 billion, 4.1% lower on an annual basis.

• Drugs and pharmaceutical exports were at $2.1 billion, 1.1% higher than over a year earlier.

• Electronic exports were at $3.5 billion, 54.7% higher than over a year earlier.

• Petroleum, crude, and product imports were up 7.9% from a year ago at $16.1 billion.

• Organic and inorganic chemical imports were at $2.5 billion, 1.3% lower on an annual basis.

• Imports of coal, coke, and briquettes were down 29.3% from a year ago at $2.4 billion.

• Imports of electronic goods were at $7.6 billion, 17.4% higher than a year earlier. 

• Machinery, electrical, and non-electrical goods were at $4.5 billion, down 12.9% over the previous year. 

• Gold imports stood at $14.9 billion, 331.3% higher than a year ago.

"Despite the unexpected surge in gold imports, we maintain that FY25 CAD/GDP is likely to track at 1.1% of GDP, as better-than-expected growth in net services exports will largely offset sharply higher gold imports," said Madhavi Arora, lead economist at Emkay.