India Trade Deficit Hits Six-Month High Amid Middle East Conflict
India's trade deficit hit a six-month high in July as imports surged amid the Middle East conflict, driven by higher oil prices and increased demand for electronics and gold. The country's merchandise trade deficit widened to $31.98 billion, exceeding expectations of $30.20 billion.
The increase in imports was largely due to a rise in crude oil prices, which stood at $18.31 billion in July. Electronics goods imports also saw a significant jump, increasing by over 44% year-on-year to $14.37 billion. Gold imports rose nearly 5% to $4.16 billion.
On the other hand, exports hit a record high of $44.24 billion for July, surpassing the previous peak of $38.34 billion in 2022. Exports to the Middle East rose by 8.6% year-on-year to $5.7 billion in July.
The U.S. remained India's top export destination, with goods shipments totaling $33.49 billion in April-July. However, the increase in freight rates due to shipping disruptions is squeezing exporters' margins, particularly for rice, textiles, and pharmaceuticals.