India's Trade Deficit Widens as Energy Costs Surge Amid Middle East Conflict

India's trade deficit expanded significantly in April to $28.38 billion, surpassing analyst estimates of $26 billion, driven primarily by soaring energy import costs. The deficit jumped from $20.6 billion in March due to a broad-based increase in imports, particularly oil, which rose approximately 60% month-over-month. This surge stems from heightened international oil and gas prices following the closure of the Strait of Hormuz amid the ongoing Iran war, forcing India to source costlier crude alternatives. While total exports grew 13.8% year-over-year to $43.56 billion, led by strong electronics and services sectors, the widening gap pressures the current account. In response to a record-low currency valuation against the dollar, the Indian government raised gold import duties from 6% to 15%, a move expected to reduce gold import volumes in May. Analysts have revised inflation estimates upward and downgraded economic growth forecasts, with BMI predicting GDP growth will slow to 6.7% in the 2026/2027 fiscal year due to the persistent oil supply shock and its broader economic repercussions.