The increase in oil imports increases the trade imbalance in April

The increase in oil imports increases the trade imbalance in April

According to ICRA, the merchandise trade deficit would rise to a record $250-255 billion in 2022-23, as merchandise export growth is slow to about 9% over the course of the year. Imports, on the other hand, were forecast to increase by around 16%, with domestic demand expected to outperform foreign demand growth.

Petroleum items (up 126.7 percent), electrical goods (71.7 percent), grains (60.8 percent), coffee (59.4 percent), processed food (38.8 percent), and leather products (36.7 percent) led the way in April's export increase, according to the Ministry.

Coal and petroleum imports were more than previously estimated, with the former increasing 146.3 percent to $4.93 billion. The value of fertiliser imports almost tripled to $1.2 billion in April 2021, up from $376 million in April 2021. The surge in the value of these three imports reflects the sharp rise in world prices.

"While imports and exports expanded sharply, the goods trade imbalance worsened to $20.1 billion... fuelled by oil," Aditi Nayar, chief economist at ICRA, stated. "Given the higher commodity costs after the Russia-Ukraine crisis, total goods imports remained over $60 billion for the second month in a row," she added.

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