Rise in oil imports widen trade deficit in April

A surge in crude oil imports pushed India’s goods import bill to $60.3 billion in April, up 31%, official data showed. With exports of goods rising 30.7% to $40.19 billion, the trade deficit widened to $20.11 billion last month from $18.5 billion in March.

Meanwhile, India’s crude oil imports hit a record high in April, topping 4.8 million barrels a day, S&P Global Market Intelligence said in a report on Friday. Crude oil of Russian origin accounted for 5% of India’s total sea imports for the first time, the research firm added.

Trade data released by the Department of Commerce and Industry put April’s petroleum imports at about $20.2 billion, up 87.5% from the $10.7 billion of April 2021 imports.

growth too slow

Rating agency ICRA expects the goods trade deficit to rise to a record $250-255 billion in 2022-23 as growth in goods exports slows to around 9% over the year. On the other hand, imports were forecast to increase by around 16%, with domestic demand growth outpacing foreign demand.

Export growth in April was led by petroleum products (up 127.7%), electronics (71.7%), grains (60.8%), coffee (59.4%), processed foods (38.8%) and leather products (36.7%). Record merchandise exports for April, the ministry said.

Coal and petroleum imports were higher than previous estimates – with earlier logging jumping 146.3% to $4.93 billion. The value of fertilizer imports has almost tripled to $1.2 billion from $376 million in April 2021. The increase in value of these three imported items reflects the sharp increase in world market prices.

“While imports and exports grew at similar rates, the goods trade deficit widened to $20.1 billion…driven by oil,” noted Aditi Nayar, ICRA’s chief economist. “In the face of increased commodity prices after the Russia-Ukraine conflict, total merchandise imports remained above $60 billion for the second straight month,” she added.

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