India's trade deficit surges to $34.68B in January
What's the story
India's merchandise trade deficit widened to $34.68 billion in January, up from $25.04 billion in December, government export and import data showed today. The sharp increase is mainly due to a surge in gold and silver imports. A Reuters poll of economists had predicted a January trade deficit of $26 billion, making the actual figure much higher than expected.
Trade figures
Exports drop to $36.56B, imports rise
In January, merchandise exports dropped to $36.56 billion from December's $38.51 billion. Meanwhile, imports rose to $71.24 billion from $63.55 billion in December. The increase in imports is mainly due to a spike in gold and silver shipments, an official said. Commerce Secretary Rajesh Agrawal noted that India's exports during April-January of this fiscal year grew by 2.22% to $366.63 billion, with goods and services exports likely surpassing $860 billion for the full fiscal year.
Tariff effects
End of high US tariff impact on Indian exports
The January trade figures also mark the end of the impact of high US tariffs on Indian exports. Earlier this month, US President Donald Trump announced a cut in tariffs on Indian goods from 50% to an effective rate of 25%, with a further reduction to 18% once a proposed trade agreement is signed. As part of the deal, India has agreed to lower Russian oil imports and plans to more than double its annual imports of US goods.