India’s exports, battered by drying shipment orders for most part of the last one year, grew by 1.6% in April, recording the fourth successive monthly growth, but sharp jump in gold imports widened the trade deficit.
“Imports has seen an undue growth of 10.9% (in April to $41.95 billion) largely contributed by significant increase in gold imports,” said SR Rao, commerce secretary.
Gold and silver imports during April grew 138% to $7.5 billion compared to $3.1 billion in the year-ago period.
Exports during the month stood at $24.16 billion against $23.7 billion in the same month last year.
“The government sees this growing trade imbalance with concern and would be taking into stock this heavy import of gold and would come out with considered steps to contain this growing trade deficit,” said Rao.
“Gold imports have risen sharply as consumer demand for gold shot up significantly,” said Sonal Varma, economist at Nomura. “Consumers likely brought forward their purchases in response to the recent sharp fall in gold prices. As a result, higher gold import volumes offset the price effect.”
After declining for consecutive eight months from May 2012, exports entered the positive zone in January this year.