Mint Quick edit | Should India’s mixed trade bag prompt a rupee rethink?
The first month of 2024-25 has been a mixed bag for India’s trade. Exports edged up 1.1% from a year earlier to nearly $35 billion in April, but imports grew faster at 10.3% to $54.1 billion, widening the trade deficit to a four-month high of $19.1 billion. It’s clearly a relief that exports have held up despite geopolitical tensions and trade disruptions globally.
For India’s economic growth to stay strong, it will need all the external demand support it can get. That said, the wider trade deficit could be a source of worry if it persists. April’s jump is being attributed significantly to increased gold and petroleum imports.
This could be partly due to inflation in their prices. Imports of gold, for example, more than doubled to $3.11 billion in April from $1 billion a year earlier. With headwinds ruffling economies around the world, safe-haven quests have sent investors and central banks into the comfort of gold.
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