India's Trade Deficit At All-Time High Fueled By Gold Imports, Service Exports Outpace Goods For First Time This Year

India's services exports in November outpaced goods exports for the first time this year, driven by robust growth in IT services despite subdued global demand for goods and increased shipping costs caused by disruptions in the Red Sea.

The data revealed by the Commerce and Industry Ministry on Monday (16 December) shows that the country’s goods trade deficit reached a record high of $37.84 billion, fueled by significant increases in gold and petroleum imports.

Goods imports surged by 28 per cent to $69.95 billion in November, up from $54.48 billion a year ago. In contrast, goods exports contracted by 4.83 per cent, falling to $32.11 billion compared to $33.74 billion during the same period last year.

Gold imports witnessed a threefold rise in November, climbing to $14.8 billion from $3.4 billion in the previous year. The spike can be attributed to heightened demand during the wedding and festive season.

The government’s decision earlier this year to reduce gold import duties from 15 per cent to 6 per cent in the Union Budget might also have contributed to fourfold gold imports.

Meanwhile, electronic goods exports maintained strong momentum, increasing by 54.72 per cent to $3.4 billion, while engineering goods exports rose by 13.75 per cent, reaching $8.89 billion compared to $7.82 billion in November last year.

"India’s non-petroleum exports are growing consistently, services exports are also growing sharply. India’s goods and services exports are much faster in comparison to the world in the last 10 years," Commerce Secretary Sunil Barthwal said.