Trade gap widens on surge in crude prices

A surge in the country's oil import bill fueled by persistently rising global crude prices overshadowed robust increase in exports, as the government on Monday released trade data for April, the first month of the current fiscal year.

A surge in the country's oil import bill fueled by persistently rising global crude prices overshadowed robust increase in exports, as the government on Monday released trade data for April, the first month of the current fiscal year.

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Exports grew 31.5 per cent in April, but a faster increase in imports — up 36.6 per cent —stoked fears that the country's finances could come under pressure from a widening trade deficit.

"The rise in crude oil prices is going to widen India’s trade deficit in 2008-09. That, in turn, would throw greater challenges at the export sector to maintain its growth momentum" said TK Bhaumik, a Delhi-based economist.

The trade deficit, the gap between the country's exports and imports, for April is estimated at $ 9.87 billion, up by over 40 per cent from $ 6.81 billion in same month a year ago, according to data from the Commerce Ministry.

Exports totaled $ 14.40 billion (Rs.57633 crore) in April against $ 24.27 billion in imports. The rise in imports were driven by global crude prices that soared the country's oil import bill by 46.2 per cent to $ 8.02 billion.

India, which imports about 70 per cent of its total crude oil requirement, faces the twin challenges of containing the import bill and maintaining retail fuel prices at reasonable levels to prevent political backlash in an election year.

Oil imports totaled $ 77 billion through the last fiscal year ended March.