India's August goods trade deficit narrows as gold imports plunge

India's goods trade deficit came in lower than expected in August at $26.86 billion, according to official figures released on Tuesday and reported by Business Recorder. The contraction was driven mainly by a steep decline in gold purchases from abroad, which offset a small dip in merchandise exports. Analysts polled by Reuters had projected a shortfall of $32 billion, a level close to July's reading.

The import decline came as the U.S.-Iran conflict escalated, with disruption to fuel supplies and sea transit raising price concerns for India, one of the world's largest oil buyers. Average crude costs for India reached $90.19 a barrel in August, versus $82.04 in July, and the basket has hit $109.76 during September thus far.

Goods exports slipped slightly, landing at $43.81 billion in August, down from $44.24 billion the month before, yet that was the strongest August in at least ten years. Services shipments abroad reached $38.87 billion, against imports of $21.42 billion, which left $17.45 billion in net receipts. The United States stayed India's leading export market, taking goods worth $42.79 billion in the April to August period, compared with $40.39 billion in the same period last year.