India’s trade deficit surge 26% on Y-o-Y basis in October

India's trade deficit in October surged by 26.1% to $13.36 billion, however it narrowed from $14.25 billion in the previous month, thanks to decline in oil import. On one hand, India’s imports fell to $39.45 billion from $ 43.15 billion in September, but on the other, on a year-on-year basis, it increased 3.16%. Oil and gold are the key contributors to India's import bill. Oil imports fell to $ 12.36 billion as against $14.50 billion, on a month-on-month basis, the same also slipped by 19% lower on Year on Year (Y-o-Y) basis. Non-oil imports declined to $27.08 billion as against $ 28.65 billion, m-o-m basis. However, in a bit of concern, gold imports surged to $4.18 billion from 4 3.75 billion in October. On a year-on-year basis, gold imports jumped to $ 4.17 billion from$ 1.09 billion mainly because of the festivals like Diwali and Dhanteras, which are considered as most auspicious occasions in India to buy the yellow metal. In another spot of concern, exports in October hit lowest level since March 2014 as they fell to $26.09 billion from $28.90 billion last month. On a year-on-year basis, the fall has been to the tune of 5.04%. Cumulatively, during April-October period of the current fiscal, the country's exports were up by mere 4.72% to $189.79 billion, while imports rose by 1.86 per cent to $273.55 billion, leaving behind a trade deficit at $83.75 billion as against $87.31 billion in the same period last fiscal. The government had in the previous year clamped down on gold imports stipulating that nominated agencies could import gold on the condition that 20% of the consignment would be exported. The scheme, commonly referred to as the 80:20 scheme, was relaxed in May this year when RBI allowed star and premier export houses to import the commodity. However, with the sharp uptick in the shipments of yellow metal, reports now suggest that RBI is in talks with the Government for a decision to curb gold imports.