India’s trade deficit widened to $28.38 billion in April, a sharp rise from the $20.67 billion in March, amid rising crude oil prices and rising tensions in the Middle East due to the Iran-US war. This is higher than market expectations. This is much higher than the trade deficit of $20.67 billion in March. Economists had estimated a trade deficit of $26.5 billion in April. However, this was higher than expected due to an increase in imports.
According to official data, India’s merchandise exports rose to $43.56 billion in April, from $38.92 billion in March. Similarly, imports rose to $71.94 billion from $59.59 billion. The services sector provided some reassurance. Services exports in April are estimated to be $37.24 billion and imports are estimated to be $16.66 billion. As a result, total goods and services exports reached $80.80 billion. India’s imports from the Middle East fell by 31.64 per cent to $10.47 billion in April, compared to $15.32 billion a year earlier. This is due to geopolitical instability and the blockade of key sea routes. India imports more than 80 per cent of its crude oil and about 60 per cent of its cooking gas. Of this, the Middle East’s contribution is huge. The prolonged Iran war and the blockade of shipping through the Strait of Hormuz have pushed crude oil prices to the $100 per barrel mark in the international market.
It is now above $108. The Indian rupee has become the worst performing currency in Asia this year due to energy shocks. The rupee crossed the 96 level against the dollar on Friday. As a result, the import bill is expected to increase further. According to official data, the US is India’s largest export partner. Similarly, China is the largest source of imports.
