Trade deficit widens again as festive gold demand bites
Gold and silver imports increased to $1.3 billion in October from $0.8 billion in September, 2013, driven by high purchases of precious metal ahead of the festival season.business Updated: Nov 12, 2013 01:23 IST
Hopes of an economic turnaround have sprung anew as India’s exports recorded a fourth successive month of expansion, growing by 13.47% in October to reach a two-year high of $27.2 billion in October, but the trade deficit widened on higher gold and silver imports.
Gold and silver imports increased to $1.3 billion in October from $0.8 billion in September, 2013, driven by high purchases of precious metal ahead of the festival season.
This pushed the trade deficit—the difference between export earnings and import payments-- $10.5 billion as against $6.76 billion in September, although it is still far lower than last October’s $20.2 billion.
Oil imports grew by 1.7% year-on-year to $15.2 billion.
Overall imports declined by 14.5 per cent to $37.8 billion in October as compared to the same period last year.
“Exports have shown a significant increase and imports fell significantly,” commerce secretary SR Rao said.
“All the regions are doing well. We see no concerns. Only South Asia and Latin America are marginally low,” Rao told reporters in the national capital.
M Rafeeque Ahmed, President, Federation of Indian Export Organisations said that going by the current trend, trade deficit for the current fiscal may be around $140 billion, sharply lower than last year’s $192 billion .
“This will ease pressure on the current account deficit which may come down to $50 bilion (from $88 bilion),” Ahmed said.