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Trade deficit widens to $16.8 bn; gold imports surge 6-fold |
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New Delhi: An over six-fold jump in gold imports in November has pushed country's trade deficit to one-and-a-half year high of USD 16.86 billion in the month, causing fresh concerns for economic policy makers.
Although exports went by 7.2 percent, the highest in the last four months, gold imports soared by 571 percent to USD 5.61 billion (over Rs 35,000 crore) in November to widen the trade gap.
Besides the precious metal, higher imports of transport goods, fertiliser, machinery and electronic goods added to the trade gap which rose to its highest level since May 2013.
The surge in gold imports has raised fresh concerns of widening current account deficit.
Both Reserve Bank and government have been saying that CAD levels are comfortable despite an upward trend, but the huge jump in gold imports may cause fresh worries to them. Besides, import curbs were eased on November 28 which could also lead to further rise in imports this month onwards.
Rating agency Crisil, however, said lower oil imports would offest the impact of higher gold shipments and CAD should remain at USD 32 billion for 2014-15.
It may be noted that economic growth has slowed to 5.3 percent in July-September from 5.7 percent in the previous quarter. Exports contribute about 25 percent in the country's GDP. It was in negative zone in October.
Exporters body FIEO said with a little push in next the four months, India would be able to achieve the export target of USD 340 billion this fiscal.
"Government should immediately re-introduce interest subsidy scheme as interest burden is hitting the small exporters who are losing their export competitiveness," Federation of Indian Export Organisations (FIEO) President Rafeeque Ahmed said in a statement.
Crisil, however, said export growth is likely to remain weak as lower oil prices will pull down petroleum product imports, which account for 25 percent of overall shipments.
High growth in textiles, engineering goods, chemicals and pharmaceuticals helped pushing exports up.
On imports front, the total shipments in the month under review jumped by 26.79 percent to USD 42.82 billion. Oil imports dipped by 9.7 percent to USD 11.71 billion. Non-oil imports, however, grew by 49.6 percent to USD 31.10 billion.
During April-November, imports were up 4.65 percent to USD 316.37 billion, while exports were up 5.02 percent to USD 215.75 billion. Trade deficit during this period stood at USD 100.61 billion.
Source : zeenews.india.com
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