India’s trade deficit ballooned in August, reaching a staggering $29.65 billion, as a global slowdown hammered exports while robust domestic demand fueled import growth, Bloomberg reports.
This marks a significant increase from July’s deficit of $23.5 billion and surpasses economists’ forecasts of a $22.8 billion gap.
The widening deficit stems from a 9.3% year-on-year decline in exports, which fell to $34.71 billion in August. Conversely, imports rose 3.3% to $64.36 billion, fueled by strong domestic demand ahead of the ongoing festive season, which extends through November.
“There’s a huge slowdown in China, which is impacting petroleum prices,” said Commerce Secretary Sunil Barthwal, acknowledging the challenges facing India’s export sector in the current global climate. “Exports are a huge challenge in the current global situation,” he added.
Despite the widening trade deficit, India remains the world’s fastest-growing major economy, projected to expand at over 7% through March 2025. However, the escalating deficit highlights the challenges facing the Indian economy, particularly in light of a global slowdown and sluggish export performance.
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