India’s trade deficit widens to $9.9 bln in March; import of petroleum, crude products nearly double

India‘s trade deficit widened to $9.91 billion in March 2022 on the back of high petroleum products, coal and electronic goods, government’s data showed. This compares with a trade deficit of $5.11 billion in the same month a year ago. In terms of merchandise trade, imports were higher than exports. Goods trade deficit widened to $18.51 billion in March, in comparison to $13.64 billion last year. However, the balance of trade tilted in favour of exports for services. Services trade surplus rose marginally to $8.6 billion, in comparison to $7.47 billion in March 2021. Goods exports rose nearly 20 percent to $42.22 billion while goods imports jumped over 21% to $60.74 billion, according to the latest trade data from the Ministry of Commerce and Ministry.

Imports for the month of March jumped due to rise in imports of petroleum and crude products, Electronic goods and imports of coal and coke. Imports of petroleum and crude products more than doubled to Rs 1.43 lakh crore in comparison to last year, partly due to spiking commodity prices due to the ongoing Russia-Ukraine conflict. “The non-gold trade deficit widened multifold to US$17.5 billion in March 2022 from US$5.1 billion in March 2021, driven by petroleum products, coal and electronic goods, partly driven by the spike in commodity prices following the Russia-Ukraine conflict,” according to Aditi Nayar, Chief Economist at ICRA.

While exports, which crossed $40 billion for the first time, ie, highest exports in a single month, were boosted by petroleum products and engineering goods in the month of March. Exports of petroleum products more than doubled to Rs 59,281.32 crore last month in comparison to March last year.

“Both non oil exports and non oil non gold imports recorded their FY2022 high in March 2022. However, the pace of growth of non oil exports marked an FY2022 low of 8.9% in March 2022, whereas non oil non gold imports expanded by a massive 76.1% in YoY terms on a subdued base,” Nayar said.