India’s Trade Deficit Widens to Record High of $24.29 Billion in April

By IndianCEO Team

Posted on May 24, 2023

India’s trade deficit widened to $24.29 billion in April 2023, from $6.53 billion in the same month last year, according to data released by the Ministry of Commerce and Industry. This is the highest trade deficit in India’s history.

The widening of the trade deficit was due to a sharp increase in imports, which rose 62.83% year-on-year to $63.22 billion, while exports rose 20.55% to $38.94 billion.

The increase in imports was driven by higher imports of crude oil, coal, and gold. Crude oil imports rose 106.87% year-on-year to $14.61 billion, coal imports rose 41.66% to $3.09 billion, and gold imports rose 108.58% to $2.35 billion.

The increase in exports was driven by higher exports of engineering goods, gems and jewellery, and pharmaceutical products. Engineering goods exports rose 25.37% year-on-year to $11.28 billion, gems and jewellery exports rose 25.87% to $4.21 billion, and pharmaceutical products exports rose 12.63% to $2.51 billion.

The widening of the trade deficit is a concern for the Indian economy. The government is taking steps to reduce the trade deficit, such as increasing exports and promoting import substitution. However, it is likely that the trade deficit will remain high in the near term, due to the high prices of crude oil and other commodities.

Historical Data of Trade Deficit

The following table shows the historical data of India’s trade deficit from 2013 to 2023:

Year	Trade Deficit (in billion USD)
2013	106.5
2014	108.4
2015	106.8
2016	101.5
2017	105.2
2018	108.8
2019	111.4
2020	107.0
2021	82.0
2022	122.0
2023	24.3

As you can see, the trade deficit has been increasing in recent years. This is due to a number of factors, including the rising prices of crude oil and other commodities. The government is taking steps to reduce the trade deficit, but it is likely that the deficit will remain high in the near term.

Impact of Trade Deficit on the Indian Economy

The trade deficit has a number of negative impacts on the Indian economy. First, it leads to a loss of foreign exchange reserves. Second, it makes the Indian rupee less valuable. Third, it increases the cost of living for Indians. Fourth, it can lead to inflation.

The government is taking steps to reduce the trade deficit. These steps include increasing exports, promoting import substitution, and reducing subsidies. However, it is likely that the trade deficit will remain high in the near term, due to the high prices of crude oil and other commodities.

Conclusion

The widening of India’s trade deficit is a concern for the Indian economy. The government is taking steps to reduce the trade deficit, but it is likely that the deficit will remain high in the near term. The trade deficit has a number of negative impacts on the Indian economy, including a loss of foreign exchange reserves, a less valuable rupee, an increase in the cost of living, and inflation.

India’s Trade Deficit Widens to Record High of $24.29 Billion in April