India's August goods trade deficit narrows as gold imports plunge
Sept 15 (Reuters) - India's goods trade deficit (INTRD=ECI), opens new tab unexpectedly narrowed to $26.86 billion in August, government data showed on Tuesday, as imports, particularly of gold, fell sharply to make up for a slip in exports from the previous month.
The lower import bill coincided with an intensifying U.S.-Iran conflict, disrupting oil supplies and shipping and adding to inflation risks in India — the world's third-largest oil importer and Asia's third-largest economy.
New strikes on Saudi Arabia and on ships in the Gulf are testing nerves in the Middle East, after an attack on a Saudi oil pipeline and an advance by Yemen's Houthis threatened to worsen the wartime global crisis.
India's crude basket averaged $90.19 a barrel in August, up from $82.04 in July, and has climbed to $109.76 so far in September, government data showed.
In August crude oil imports jumped 25.8% year-on-year to $16.69 billion.
GOLD IMPORTS HALVE
Economists had expected the goods trade deficit to be $32 billion in August, according to a Reuters poll, close to the previous month's deficit.
Gold inflow nearly halved to $2.3 billion from $4.16 billion in July, when imports had rebounded sharply on inventory restocking ahead of the festive season.
That helped cut total imports to $70.67 billion from $76.22 billion.
On the trade deficit, Trade Secretary Rajesh Agrawal said
strong domestic growth, rising energy needs and demand for critical inputs had pushed up imports in the first five months of the fiscal year.
Economists at Barclays said the August deficit narrowed as non-oil, non-gold imports corrected from July's record high, while the services surplus widened to over $17 billion.
EXPORTS SLIP, STILL HIGH
Merchandise exports fell marginally to $43.81 billion in August from $44.24 billion in July. Despite that, August exports were the highest for the month in at least a decade.
The country is seeking to diversify its export markets, he said, with its trade deal with Britain now in force and a broader pact with the European Union moving towards implementation, potentially opening up greater access for domestic goods.
Goods and services exports rose almost 25% year-on-year to $82.68 billion in August, while the trade deficit narrowed to $9.41 billion from $11.62 billion a year earlier, Agrawal said, noting a rise in engineering and electronics goods exports.
Export growth in automobiles and resilient services shipments provided some support to India's overall export performance.
Automobile exports rose 22.2% year-on-year to 681,000 units in August, driven by strong growth in two-wheelers and three-wheelers, though passenger vehicle exports declined 17%, data released by the Society of Indian Automobile Manufacturers on Tuesday showed.
Services exports stood at $38.87 billion, and imports at $21.42 billion, trade ministry estimates showed.
The U.S. remained the top destination for Indian exports, with goods shipments rising to $42.79 billion in April-August from $40.39 billion a year earlier.
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