A costlier oil import bill shot up trade deficit in July to a monthly record of $10.8 billion, even as exports recorded a healthy 31.2% growth to $16.35 billion.

Oil imports during July ballooned to $9.48 billion, also a record 69.3% higher than $5.6 billion in the corresponding period last year. Crude oil too had touched a record high of $147 per barrel in July. The country had imported 11.85 million tonne crude oil in July this year, around 9% more than the corresponding month last year. Oil imports during April- July 2008 were $35 billion, a 54.9% jump from $22.6 billion in the same period last year.

The $10.8 billion trade deficit in July was an 86.2% rise over $5.8 billion in the same month last year, while balance of trade for April-July 2008 touched $41.2 billion, up 51% from $27.3 billion in the same period last year.

Describing the widening trade deficit as a worrying factor, NR Bhanumurthy, an economist with Delhi-based Institute for Economic Growth, said, ?It (increase in trade deficit) will lead to exchange rate depreciation and make our imports much more costlier in future also.

He said though the macro-policy now is to mitigate inflation, inflation is mostly due to increase in international prices, rather than domestic. ?Any weakening of rupee will create higher inflation expectation,? Bhanumurthy said.

Exports during July were worth $16.3 billion, 31.2% higher than $12.4 billion during the same month last year. In rupee terms, exports touched Rs. 70018 crore in July 2008, 39.1% higher than the value of exports during July, 2007.

Exports for April- July, 2008 was $59.19 billion (Rs 248498 crore) as against $47.48 billion (Rs 194689 crore), registering a growth of 24.6% in Dollar terms and 27.6% in Rupee terms over the same period last year. The government has fixed a target of $200 billion for the fiscal.

G K Gupta, president, Federation of Indian Export Organisations (Fieo), said this export performance in July was good as it was despite high inflationary pressure at home and recession in major markets like Europe and the US. Gupta hoped that with decline in oil prices, imports growth could be brought under control in next few months.

However, he reiterated his demand to continue with the export assistance extended to exporters particularly to traditional sectors that are still not showing much growth. ?The recent duty drawback reduction has already dampened the spirit,? he said.

Imports during July were $27.14 billion, an increase of 48.1% over $18.33 billion in the same month last year. In Rupee terms, imports increased by 56.9%.

Imports for April- July, 2008 was $100.42 billion (Rs. 421541 crore) as against $74.84 billion (Rs. 306946 crore), a growth of 34.2% in Dollar terms and 37.3% in Rupee terms over the same period last year.

Non-oil imports during July were $17.6 billion, 38.7% higher than $12.73 billion in the corresponding month in 2007. Non-oil imports during April- July 2008 were $65.41 billion, 25.2% more than $52.24 billion in April- July, 2007.