India's Trade Deficit Hits Record High in October
Surge in gold, oil and silver imports ahead of Diwali festive season contributes to the sharp increase, but analysts predict normalization from November onwards.
- India's merchandise trade deficit rose to an all-time high of $31.46 billion in October, widening sharply from the $19.37 billion print in the prior month.
- The sharp rise in the trade deficit was largely due to a surge in imports, particularly of oil, gold, and silver. Gold and silver imports were likely driven by demand ahead of the Diwali festive season.
- Analysts predict that the October print is likely to be a one-off, with gems and jewellery imports expected to normalize from November onwards.
- Despite the shock on the trade deficit front, the FY24 current account deficit (CAD) estimate is retained at 1.9% of GDP.
- The Indian rupee fell by about 2.47% against the US dollar over the same period.
Reuters 
