India’s trade deficit widens more than expected in October

INDIA’S trade deficit widened significantly in October as imports climbed during the Hindu festival season, even though exports posted a robust growth. 

The gap between exports and imports stood at US$27.1 billion in October, Trade Ministry data showed on Thursday (Nov 14). That is higher than the US$22 billion deficit forecast by economists in a Bloomberg survey and a reading of US$20.78 billion in September.

Imports grew 3.9 per cent in October from a year earlier to US$66.3 billion, while exports rose 17.3 per cent to US$39.2 billion. 

The widening deficit could put pressure on India’s currency, which is already near record lows, prompting the central bank to intervene in the foreign exchange market to smooth out the volatility. Imports tend to pick up in the run-up to the Hindu traditional festival of Diwali, which ended about two weeks ago. BLOOMBERG