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Gold Imports Surge 22%, Exports Dip as Shipping Routes Disrupted: RBI

RBI Governor Sanjay Malhotra reported that India's merchandise imports grew by over 22% in the year's first two months, largely fueled by higher gold purchases. Conversely, exports contracted by 0.2% due to weak global demand and disruptions in key shipping routes. While global trade is expected to slow further, services exports and new trade agreements may provide some support. The RBI cautions that geopolitical tensions and high energy prices continue to pose risks to the current account deficit.

Key Points: RBI: Imports Surge 22%, Exports Dip on Global Disruptions

  • Imports surge over 22%
  • Exports contract 0.2%
  • Gold imports drive trade gap
  • Shipping disruptions hurt exports
  • Services exports remain resilient
2 min read

Imports surge 22% due to higher gold imports, exports dip because of shipping disruptions: RBI Gov

RBI Governor notes a 22% import surge driven by gold, while exports contract 0.2% due to shipping disruptions and weak global demand.

"Merchandise imports... recorded a double-digit growth of more than 22 per cent. This was largely driven by higher gold imports. - Sanjay Malhotra"

Mumbai, April 8

Reserve Bank of India Governor Sanjay Malhotra on Wednesday said India's merchandise exports contracted by 0.2 per cent in the first two months of the year, while imports recorded a sharp growth of more than 22 per cent, largely driven by higher gold imports, resulting in a widening trade deficit.

Speaking during the monetary policy announcement, the Governor highlighted that the decline in exports was due to a contraction in key global markets amid ongoing geopolitical tensions and weakening global demand.

He stated, "India's merchandise exports contracted by 0.2 per cent during the first two months of this year on a year-on-year basis. This was a result of export contraction in key markets. Merchandise imports, on the other hand, recorded a double-digit growth of more than 22 per cent. This was largely driven by higher gold imports".

He noted that the surge in imports, particularly due to increased gold imports, significantly outpaced export performance, putting pressure on the trade balance.

The central bank also said that global trade is expected to slow in 2026 compared to 2025, driven by lingering tariff-related uncertainties, the ongoing West Asia conflict, and elevated energy prices.

The RBI further pointed out that merchandise exports are likely to remain under pressure due to disruptions in key shipping routes, higher freight and insurance costs, and subdued global demand resulting from the conflict.

However, the Governor added that exports could receive support from recent bilateral and regional trade agreements signed with major trading partners. Many of these agreements were signed last year and are currently being implemented, while others are expected to become operational later this year.

Despite the weakness in merchandise exports, services exports are expected to remain resilient, providing stability to the external sector.

The RBI also said that strong services exports and steady inward remittances during the fourth quarter of last year are expected to keep India's current account deficit moderate and within sustainable levels.

At the same time, the central bank cautioned that rising global uncertainties and elevated prices of key energy commodities pose upside risks to the current account deficit in the current year.

Overall, while the external sector is facing near-term challenges due to global headwinds and rising import costs, supportive factors such as services exports and trade agreements are expected to help cushion the impact.

- ANI

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Reader Comments

R
Rohit P
The shipping disruptions are a real worry. My cousin's export business is stuck with containers at ports, costs are skyrocketing. Hope the new trade agreements the Governor mentioned kick in soon to give some relief.
A
Arjun K
At least services exports and remittances are holding strong. That's our real strength – IT, software, our people working abroad sending money home. That should keep the current account deficit in check. 💪
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Sarah B
While I understand the cultural significance of gold in India, the economic impact is significant. Perhaps a more nuanced policy is needed that doesn't penalize tradition but encourages moderation? The 22% import surge is concerning.
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Vikram M
The global situation is not in our hands, but we must focus on what we can control. Making our manufacturing more competitive and reducing logistics costs internally is key. Jai Hind!
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Karthik V
With all respect to the RBI Governor, I feel the focus is too much on reacting to global events. We need a stronger, long-term vision to make India a export powerhouse, not just cushioning impacts. The dip in exports, however small, is a warning sign.
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Meera T
Geopolitical tensions affecting trade is the new normal. It's good

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