Surge in oil imports widens trade deficit in April

A surge in crude oil imports swelled India’s goods imports bill in April to $60.3 billion, a 31% growth, official data showed. With merchandise exports expanding 30.7% to $40.19 billion, the trade deficit widened last month to $20.11 billion, from March’s $18.5 billion.

Meanwhile, India’s crude oil imports hit a record high in April, surpassing 4.8 million barrels per day, S&P Global Market Intelligence said in a report on Friday. Russian-origin crude constituted 5% of India’s total seaborne imports for the first time, the research company added.

Trade data released by the Commerce and Industry Ministry pegged petroleum imports in April at about $20.2 billion, 87.5% higher than the $10.7 billion of imports in April 2021.

Growth to slow

Rating agency ICRA said it expects the merchandise trade deficit to expand to a record $250-255 billion in 2022-23, as growth in merchandise exports would slow to about 9% over the course of the year. Imports, on the other hand, were projected to rise by about 16% with domestic demand growth expected to outpace external demand.

April’s growth in exports was led by petroleum products (up 127.7%), electronic goods (71.7%), cereals (60.8%), coffee (59.4%), processed food (38.8%) and leather products (36.7%), resulting in record goods exports for April, the Ministry said.

Coal and petroleum imports were higher than earlier estimates — with the former logging a 146.3% jump to $4.93 billion. The value of fertilizer imports almost trebled to $1.2 billion, from $376 million in April 2021. The increase in value of these three import items reflects the sharp rise in global prices.

“While imports and exports displayed a similar sharp expansion, the merchandise trade deficit widened to $20.1 billion… driven by oil,” noted Aditi Nayar, chief economist at ICRA. “Total merchandise imports remained above $60 billion for the second month in a row, given the elevated commodity prices after the Russia-Ukraine conflict,” she added.