India's goods trade deficit hits 6-month high as imports rise amid Middle East conflict

Business Recorder reported that India's goods trade deficit grew more than analysts had expected in July, reaching $31.98 billion, its highest level in six months. Imports climbed to $76.22 billion from $70.84 billion in June, lifted by higher crude prices and sharp purchases of electronics and gold. A Reuters poll had forecast a July shortfall of $30.20 billion, compared with $30.43 billion in June.

Goods exports reached a July record of $44.24 billion, above the earlier July high of $38.34 billion recorded in 2022. According to trade secretary Rajesh Agrawal, outbound shipments of refined fuels, electronics and engineering items have expanded markedly this fiscal year, while exports to the Middle East rose 8.6% to $5.7 billion in July. Electronics imports, chips included, jumped by over 44% year-on-year to $14.37 billion in July, while oil imports eased to $18.31 billion from $19.33 billion in June.

Freight charges from the region toward America and Europe rose sharply in recent weeks, putting pressure on rice, textile, pharmaceutical and engineering exporters' margins. About 45% of India's US-bound exports are exempt from a 10% duty introduced in July, a trade official said.