India’s trade deficit narrowed to a five-month low of $10.9 billion in August on the back of improving exports, which showed a double-digit growth for the second consecutive month, and a marginal decline in imports led by a sharp fall in gold imports.
Policymakers worried over a high current account deficit sought to derive optimism from the official data released on Tuesday, but analysts warned of the unabated rise in crude oil imports.
Exports grew 12.97 per cent to $26.13 billion in August — the highest growth in the last two years — while imports declined 0.68 per cent to $37.05 billion.
Exports stood at $23.13 billion in the corresponding month last year, while imports were $37.3 billion leaving the trade deficit at $14.17 billion.
Commerce and industry minister Anand Sharma said the trade data, especially the crash in gold imports, signified an “effective turnaround,” but added that rising crude import bill was a matter of concern.
The government has been talking about measures to curb the consumption of petroleum products, besides sticking on to the path of deregulation of prices, to moderate the fiscal impact of the oil import bill.
India’s annual petroleum import bill is more than $160 billion a year.
According to Ajay Sahai, director-general and CEO, Federation of Indian Export Organisations (FIEO), “India’s export competitiveness has increased by 7-8 per cent because of the depreciating rupee especially in traditional sectors which have benefitted the export performance in the last two months.”
Gold imports plunge to $650 mn
New Delhi: Gold imports have fallen sharply to $650 million in August on account of a slew of steps taken by government to curb inbound shipments of the precious metal, a development that will help narrow the record current account deficit.
Gold imports in July stood at $2.2 billion.
Commerce minister Anand Sharma said the fall in imports is expected to continue. It, however, would not impact the jewellery sector exports as “enough gold is available”. pti