India's April Trade Deficit Widens As Oil Imports Surge

India's merchandise trade deficit widened sharply in April as crude oil and gold imports increased.

The jump in crude imports reflects the impact of higher global oil prices, while gold demand continues to influence the import bill. Although exports also improved, the rise was not enough to offset the larger import cost.

A wider trade deficit can affect the rupee, foreign exchange reserves and inflation. For businesses, the concern is whether higher input costs will flow through to logistics, manufacturing and consumer prices.

Economists expect the May data to show whether the April spike is a one-off or the start of a sustained pressure phase.