India's Trade Deficit Shrinks as Gold Imports Fall
Listen to the story
India's goods trade deficit narrowed in August, according to new government data.
A trade deficit happens when a country's imports are worth more than its exports.
India's exports jumped by 25.4 percent in August compared with the same month last year.
At the same time, India's gold imports plunged sharply.
Gold is normally one of India's biggest and most expensive imports.
Because gold imports fell so much, the overall trade gap became smaller.
One figure from the report shows the trade deficit at $9.41 billion.
Another figure puts the deficit at $26.86 billion for August.
This is lower than the $27.2 billion deficit recorded a year earlier.
The different numbers may reflect different ways of counting trade data.
A smaller trade deficit is generally seen as positive for a country's economy.
It suggests that India is either selling more abroad or spending less on imports.
Strong export growth in August helped support this improvement.
The drop in gold imports also played an important role in narrowing the gap.
Analysts often watch trade deficit numbers closely to judge economic health.
India's latest data will likely be studied by economists and investors alike.
Vocabulary5 words
- trade deficit
- the amount by which imports are bigger than exports
- imports
- goods bought from other countries
- exports
- goods sold to other countries
- plunge
- to fall very quickly and by a lot
- merchandise trade
- buying and selling of physical goods between countries
Quiz
Answer key
1. 25.4 percent 2. A plunge in gold imports 3. False
Fill-in-the-blank listening
Play the audio again and fill in the missing words as you listen.
India's goods trade deficit _____ in August, according to new government data.
A trade deficit happens when a country's imports are worth more than its _____.
India's exports jumped by 25.4 percent in August compared with the same month last _____.
At the same time, India's gold imports _____ sharply.
Gold is normally one of India's biggest and most expensive _____.
One figure from the report shows the trade deficit at $9.41 _____.
Another figure puts the deficit at $26.86 billion for _____.
This is lower than the $27.2 billion deficit recorded a year _____.
A smaller trade deficit is generally seen as _____ for a country's economy.
Discussion questions
- Why might a smaller trade deficit be seen as good news for a country?
- What could explain why gold imports fell so sharply in August?
- Why do you think there are two different figures reported for the trade deficit?
- How might strong export growth affect jobs or businesses in India?