India's merchandise trade deficit narrowed to $26.86 billion in August, according to government trade data reported by Reuters. Gold imports fell sharply to about $2.3 billion from $4.16 billion in July, helping bring total imports down.
The more difficult signal sits inside the same data. Crude oil imports rose 25.8% year-on-year to $16.69 billion as geopolitical tensions pushed energy prices higher. Merchandise exports were $43.81 billion, while combined goods and services exports remained stronger.
The numbers show why the composition of the trade deficit matters. A smaller headline deficit driven by lower gold imports can coexist with a worsening energy bill, which has more direct consequences for inflation, the rupee and macroeconomic stability.
