A sharp rise in crude oil and commodity prices caused India’s trade deficit to widen in February as demand showed a mild recovery following the Omicron wave.
Mint quoted data released by the ministry of commerce and industry that India’s merchandise exports grew at a three-month low of 27.63 percent in February to touch $34.57 bn, while imports grew at a three-month high of 40.75 percent to $55.45 bn, leaving a trade deficit of $20.88 bn during the month, up from $17.42 bn in January.
Exports touched $374.81 bn in the April to February period and are likely to exceed $410 billion, according to the government’s projections.
Firming inflation and rising crude oil prices are expected to hit the pace of growth of the Indian economy.
Brent crude eased to $107 per barrel on March 15 after touching a 14-year-high of $139 last week. Gold imports nearly doubled to $4.77 bn in February from $2.4 bn in the previous month as domestic demand recovered. However, this was 9.65 percent less than the corresponding month last year, a report from Mint quoted.
Meanwhile, inflation based on the Consumer Price Index (CPI) rose to 6.07 percent in February from 6.01 percent in January, data released by the statistics ministry on March 15 showed.
Besides, data released by the commerce ministry on March 14 showed that the Wholesale Price Index (WPI)-based inflation jumped to 13.11 percent in February from 12.96 percent in the previous month. WPI, or wholesale inflation, measures the changes in prices of goods at the wholesale level or in the stages before the retail level.