Merchandise trade deficit hit a record high of $22.9 billion in September, rising from $3 billion in September 2020 and $11.7 billion in September 2019, on the back of a spike in imports, preliminary data released by the government showed Friday.
The sharp uptick in merchandise trade deficit comes despite 21.4 per cent year-on-year growth in exports to $33.44 billion, on the back of increased exports of engineering goods, petroleum products as well as gems and jewellery.
Imports last month rose 84.8 per cent to $56.4 billion, amid a rise in both price and demand for crude oil as well as demand for gold and electronic goods.
“While domestic demand is recovering, the surge in imports in September 2021 likely also reflects pent-up demand and/or inventory restocking prior to the festive season, and the pace may moderate in the coming months,” said Aditi Nayar, chief economist at credit ratings agency ICRA.
Total exports for the first six months of the fiscal year reached $197.1 billion, up 23.8 per cent over the first six months of FY20 which was not impacted by Covid-19. The government is targeting exports of $400 billion this fiscal.