• High Import Dependence: Heavy dependence on imports such as crude oil, natural gas, electronics, machinery, semiconductors and gold can increase the import bill.
• Rise in Global Commodity Prices: Higher international prices of crude oil, gas, metals and other commodities raise the value of imports even if import volumes remain similar.
• Strong Domestic Demand: Rising incomes, industrialisation and consumption increase demand for imported consumer goods, raw materials and capital goods.
• Weak Export Growth: Slow global demand, recession in major markets or loss of export competitiveness can reduce export earnings.
• Currency Depreciation: Depreciation makes imports more expensive. Although it can make exports cheaper internationally, the immediate effect may be a higher import bill, especially for essential imports.
• Low Manufacturing Competitiveness: High logistics costs, infrastructure gaps, technological dependence and lower productivity can make domestic products less competitive in global markets.
• Import of Capital Goods: Developing economies often import machinery and advanced technology for infrastructure and industrial expansion, temporarily widening the trade deficit.
• Trade Barriers Abroad: Tariffs, non-tariff barriers, protectionist measures and stricter standards in foreign markets can restrict a country’s exports.

Source: The Hindu