India's trade deficit has surged to a ten-month high of $29.7 billion, primarily driven by soaring gold imports and declining exports. In August, imports reached a record $64.4 billion, significantly influenced by the festive season's demand for gold, coupled with a reduction in import duties from 15% to 6%.
Meanwhile, exports fell by 9.3% to $34.7 billion, impacted by global economic challenges such as reduced demand from key trading partners like China and the EU. This widening trade gap raises concerns about India's economic stability as it navigates through these global headwinds[5].
Citations:
[1] https://www.imf.org/en/Blogs/Articles/2024/09/12/trade-balances-in-china-and-the-us-are-largely-driven-by-domestic-macro-forces
[2] https://www.ecb.europa.eu/press/economic-bulletin/focus/2022/html/ecb.ebbox202108_01~e8ceebe51f.en.html
[3] https://documents1.worldbank.org/curated/ar/698051468128113998/310436360_20050014095725/additional/multi0page.pdf
[4] https://www.weforum.org/agenda/2024/01/chief-economists-headwinds-facing-global-economy/
[5] https://www.policycircle.org/economy/why-is-india-trade-deficit-surging/
[6] https://pib.gov.in/PressReleaseIframePage.aspx?PRID=2034949
[7] https://www.imf.org/en/Blogs/Articles/2023/10/10/resilient-global-economy-still-limping-along-with-growing-divergences
[8] https://tradingeconomics.com/india/exports/brazil/cotton