NEW DELHI: India's merchandise trade deficit widened to a record $22.6 billion in September, the highest in at least about 14 years, as crude oil and gold imports surged, data released by the government showed on Thursday.
However, the widening trade deficit is unlikely to give a major trouble to the Reserve Bank of India as the trade surplus in services and inflow of foreign funds in stock and debt markets have provided a cushion.
India's forex reserves crossed $637 billion at the end of September. The current account surplus stood at $6.5 billion in April-June quarter, data from the country's central bank released earlier showed.
The sharp rise in merchandise trade deficit reflected advance imports to build up inventories ahead of the festive season and higher oil imports to partly offset hardening prices, said Aditi Nayar, chief economist at ICRA, the Indian arm of rating agency Moody's.
"The trade deficit is expected to moderate in subsequent months," she said, noting that it could fall to in the range of $13 billion to $16 billion a month in the second half of the current fiscal year ending in March 2022. India's merchandise exports rose $33.8 billion for the month from $27.56 billion in the same period last year, while purchases of crude oil and gold pushed imports to $56.39 billion in September from $30.52 billion last year.
Oil imports rose nearly three times to $17.44 billion in September from $5.83 billion in the same month last year, while gold imports climbed to $5.1 billion from $601 million. Brent crude oil futures rose above $84 a barrel on Thursday as expectations that soaring natural gas prices will drive a switch to oil to meet winter heating needs bolstered demand.
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