India's merchandise trade deficit widened to $30.21 billion in September as the rise in imports outpaced that in exports, though a rise in outbound shipments and trade deals could narrow the balance over coming months.
The trade gap has widened as Asia's third-largest economy grapples with a prolonged Iran war that has made energy costlier, hurt shipments to the Middle East and battered markets. India raised interest rates earlier this month and announced a raft of measures to support the rupee.
India's trade deficit stood at $26.86 billion in August.
Merchandise exports rose to $44.40 billion in September from $43.81 billion in the previous month, while imports increased to $74.61 billion from $70.67 billion.
Export growth was broad-based, reflecting strength across sectors including petroleum products, meat, dairy, poultry, electronic goods, handicrafts, and engineering goods, Trade Secretary Rajesh Agrawal told reporters.
India is seeking to diversify its export markets, with a trade deal with New Zealand set to take effect next week and its pact with the UK already in force, while a broader agreement with the EU is moving towards implementation.
Agrawal said negotiations with the US were moving in the "right direction," with legal work underway.
"We anticipate concluding and signing the trade deal at the earliest possible time," Agrawal said, adding that India was seeking preferential market access and greater tariff stability under the proposed agreement.
Ties with the US have been rocky this past year over issues including President Donald Trump's repeated claim of brokering an India-Pakistan ceasefire and a US military attack on a ship off Oman that killed three Indian seafarers.
The US remained the top destination for Indian exports, with goods shipments rising to $50.81 billion in April-September from $45.82 billion a year earlier.
India's services exports stood at $36.35 billion in September, and imports at $19.44 billion, trade ministry estimates showed.
Overall goods and services exports rose 13.84% year-on-year to $476.20 billion in April-September from a year earlier, while imports increased 15.68% to $551.13 billion, data showed.
GOLD IMPORTS FALL
Gold imports fell to $1.8 billion from $2.3 billion in August, when imports had rebounded sharply on inventory restocking ahead of the festive season. Gold imports for April-September fell 27.32% year-on-year to $19.27 billion.
Export growth in automobiles and resilient services shipments supported India's overall export performance.
India's automobile exports rose 22.5% year-on-year to 684,481 vehicles in September, led primarily by a 26.8% jump in two-wheeler shipments to 544,797 units, data released by an auto manufacturers body showed.
Passenger vehicle exports, however, fell 2.2%.
Reporting by Shivangi Acharya, Manoj Kumar; Editing by Sonia Cheema and Mrigank Dhaniwala
