India's trade deficit widens to $28.38 billion in April as imports outpace exports

NEW DELHI: India’s merchandise trade deficit widened to $28.38 billion in April, government data showed on Friday, as the Middle East conflict continued to hinder shipments while disrupting energy imports and making them costlier.

Concerns that the energy shock from the months-long Iran war could slow growth, raise inflation, and hit India’s balance of payments have led to a raft of interventions from policymakers as the rupee plummets to record lows, making it Asia’s worst-performing currency this year.

Economists had expected the trade deficit to be $26.5 billion, according to a Reuters poll, compared with a deficit of $20.67 billion in March.

India’s merchandise exports rose to $43.56 billion from $38.92 billion in March, while imports rose to $71.94 billion from $59.59 billion, data showed.

India, the world’s third-largest oil importer and consumer, imports more than 80% of its crude oil needs and 60% of its cooking gas, with the Middle East accounting for a large chunk of the supply.

Global crude prices have spiked to as much as $120 per barrel since the Iran war started at the end of February, keeping the Strait of Hormuz largely shut.

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Indian Prime Minister Narendra Modi has urged a spate of measures including fuel conservation, work-from-home practices, and limits on travel and imports, to conserve foreign exchange reserves.

The government estimates that services exports stood at $37.24 billion in April and imports at $16.66 billion, data showed.

India’s April gold imports likely remained subdued — with shipments seen falling to a near 30-year low after banks halted purchases — which may have helped contain the overall trade gap, though detailed data is awaited.