Exports growth at 5-month low; trade gap widens

Written by fe Bureau | New Delhi | Updated: Sep 16 2014, 07:21am hrs
A near tripling of gold imports year-on-year widened the trade deficit in August to a four-month high of $10.83 billion. Negative growth in exports of petroleum products and many other commodities resulted in exports growth for the month falling to a five-month low of 2.35% at $26.95 billion.

Gold imports in August rose to $2.03 billion from $738.7 million a year ago. However, imports of petroleum, transport equipment, fertiliser, coal, project goods and silver registered negative growth.

Commerce minister Nirmala Sitharaman recently said the government was not considering reducing gold import duty though an earlier hike in such duty had helped in bringing down CAD from 4.7% of GDP in 2012-13 to 1.7% in 2013-14.

The gold import duty was increased to 10% last year to contain CAD and as a result as imports of the yellow metal declined to 638 tonnes in 2013-14 from 845 tonnes in the previous fiscal. Oil imports fell by 14.97% to $12.83 billion, but non-oil imports (including capital goods) during the month rose by 13.82% to $24.95 billion. Overall imports in August grew by just 2.08% to $37.79 billion.

Barring chemicals, pharma and engineering exports, which registered a growth of 2.66%, 7% and 22.2%, respectively, several sectors including tea, coffee, rice, tobacco, spices, oil meals, iron ore and petroleum products registered negative growth.