Gold imports grew nearly 200% in October 2025 to $14.7 billion from $4.9 billion in October 2024. File.
| Photo Credit: Reuters

Overall goods exports are now estimated to be 1.6% higher through the April to December 2024 period at $321.7 billion, while imports have risen 5.15% to $532.5 billion. Image for representation.
| Photo Credit: The Hindu

India’s goods exports contracted 1% year-on-year in December to a fraction over $38 billion, while imports grew 4.9% to almost $60 billion, but this narrowed the merchandise trade deficit to a three-month low of $21.9 billion, reflecting a sharp moderation from November’s record gap of $31.8 billion.

Gold imports which were feared to have spiked to a fresh high of $14.9 billion in November, before the Centre corrected that tally by $5 billion last week to $9.9 billion citing an erroneous ‘double count’, more than halved sequentially in December to $4.7 billion. However, this still marked a significant 55.4% increase over the yellow metal’s December 2023 imports.

Commerce Secretary Sunil Barthwal sought to play down concerns about the export blip, saying that shipment values have grown in every quarter through the first nine months of this financial year. This shows that they have not only been resilient during a challenging year but also more consistent, he said. Officials also stressed that December’s export tally marked only the third occasion in 2024-25 that outbound shipments’ value has crossed the $38 billion mark.

Petrol prices crash

Overall goods exports are now estimated to be 1.6% higher through the April to December 2024 period at $321.7 billion, while imports have risen 5.15% to $532.5 billion. On a year-on-year basis, December’s trade deficit was 17% higher, while the total deficit through the year is up 11.1% at $210.8 billion.

Petroleum imports rose 2.2% to $15.3 billion last month, but petroleum product exports tanked a sharp 28.6%, to just $4.9 billion. Through April to December 2024, exports of petro products were 20.84% lower at a little over $49 billion, while imports rose 6.4% to $138.31 billion.

Mr. Barthwal noted that this is largely owing to a 20% decline in petroleum prices over this period, pointing out that non-petroleum exports have been rising consistently. Excluding petroleum trade, India’s exports were up 5.05% in December, and 7.05% higher through the April to December 2024 period, officials pointed out.

‘Urgent help needed in Budget’

Exporters were not as sanguine, even though they attributed part of December’s export dip to volatile commodity and metal prices, as well as currency fluctuations and logistical challenges affecting export flows to key markets like Europe, Africa, and the Commonwealth of Independent States (CIS).

Federation of Indian Exporters’ Organisation (FIEO) president Ashwani Kumar called for “urgent” measures in the upcoming Union Budget to boost manufacturing and labour-intensive sectors, and resolve the trade finance issues that particularly dent micro, small and medium enterprises’ competitiveness.

A tariff war by the incoming U.S. administration could throw up new opportunities for India, Mr. Kumar noted, mooting the need for a focused export strategy for key markets like the U.S., the continuation of measures like the Interest Equalisation Scheme, and a resolution of GST-related export challenges to ensure sustained growth.

The Centre is non-plussed about the recent spate of record-high import bills and is not actively mulling any import compression measures. File
| Photo Credit: The Hindu

The Centre is non-plussed about the recent spate of record-high import bills and is not actively mulling any import compression measures, top trade officials asserted, attributing the rising import tallies to India’s relatively faster growth vis-à-vis the rest of the world, and the use of some incoming goods like precious metals and electronics as inputs for exported items.

Over the past three months, India’s goods imports have scaled fresh highs twice, hitting an all-time high of $64.34 billion in August, which was subsequently eclipsed by October’s tally of $66.34 billion. While August clocked the second highest monthly merchandise trade deficit, the gap was $27.14 billion in October, the third highest on record, aided by a 28-month high 17.5% uptick in exports.

In August, record gold imports had fuelled the import bill, while October’s imports were driven by both gold and oil imports, that had risen 62% and 46.4%, respectively from September’s levels.

Between April and October, goods imports are up 5.8% at $416.9 billion, while outbound shipments grew by a more modest 3.2% to $252.2 billion, lifting the deficit to $164.6 billion from just under $150 billion last year.

“We need not be unnecessarily worried about rising imports or take a mercantilist view about trade that a few countries had once taken against free trade, thinking it is always better to export more and import less and keep a positive trade balance,” a top Commerce Ministry official said in response to a query from The Hindu on the import bill spikes.

“If everybody starts saying ‘We will export more and import less’, then, trade will not happen. Some countries have to export more and some have to import more. What is material is the nature of those imports,” he noted.

For exporting finished goods in sectors like electronics, India may require certain imports to build up the value chain. “Once we develop the manufacturing capabilities and ecosystem, the story changes as it did in automobiles,” the official pointed out. India, he emphasised, should be more focused on raising exports which would also enable higher imports.

Commerce and Industry Minister Piyush Goyal echoed this sentiment on November 19. “A lot of our imports are directly correlated to our exports so when you look at the number of months of imports our foreign exchange reserves can support, you need to calibrate that,” the minister said at the CITIC CLSA India Forum.

Indicating the Ministry may conduct a study on this aspect of imported inputs aiding exported , the minister noted: “Let’s say, if we are importing $30-40 billion of gems and jewels, directly adding value here and then exporting them, or the $15-17 billion of mobile phones that we export, for which $10-12 billion of componets are being imported…”

Beyond such imports, Mr. Goyal said there are only three-four other things India is really importing — pulses and edible oils like palm oil, crude petroleum, coking coal needed for steel production and a ‘little bit of thermal coal for port-based power plants’.

“I think there’s enough coal in India so we can do away with that. Then add some gold of about $50 billion, it’s not a problem. So if one looks at the India import basket – you will find there’s not much… Our export of marine and food products was $55 billion last year, much more than our import of pulses and edible oils,” he pointed out. Moreover, with services exports yielding a rising trade surplus, the net current account deficit is still about 1% of GDP, which the minister asserted was not “serious enough to be a concern” for the economy.

The trade official quoted earlier said India’s economy is growing faster than the world so consumption and import demand is higher. “If you look at the U.S., it maintains a very huge deficit with other countries, but their economy is still doing extremely well,” he pointed out.

“When you look at imports, you should be able to only finance those imports. So currently, if you look at our imports, remittances, FDI inflows, and our foreign exchange reserves, we are in a very comfortable position to deal with imports,” the official underlined.

Photo used for illustration purpose only.
| Photo Credit: The Hindu

India’s goods exports dropped 9.32% to $34.71 billion in August, while the import bill expanded 3.3% to $64.36 billion.

The trade deficit widened to a ten-month high of $29.65 billion, reckoned to be the second highest monthly gap in goods trade.

“Gold imports more than doubled from $4.9 billion a year ago to $10.06 billion this August. Trade deficit should not be a matter of concern for a developing economy and you should not compare the deficits of developed countries with fast growing countries like India,” said Commerce Secretary Sunil Barthwal.

“To the extent there are no foreign exchange issues, it should not matter,” he asserted.

On the spike in gold imports, Trade Ministry officials said “Gold prices have declined globally and there has also been an import duty cut. Moreover, this is the time of the year that jewellers start stocking up for the festive and wedding season.”