Indias trade deficit widens to $10.56 billion in October; exports rise for fourth straight month After falling to a two-and-a-half-year low the previous month, Indias trade deficit widened to $10.56 billion in October against $6.7 billion in September as higher demand for oil and gold pushed up imports. However, that is unlikely to worry the authorities as although the gap widened from that in September, it remained way below last year’s level, when the gap was at $20.21 billion. Meanwhile, in a positive sign, exports rose year-over-year (Y-o-Y) for the fourth straight month at a double-digit pace, at $27.27 billion, up 13.47% from October 2012 and almost the same as Septembers $27.68 billion. On the other hand, imports shrank to $37.83 billion against $44.24 billion a year earlier. However, gold and silver imports for the month crept higher at $1.3 billion from $0.8 billion in September, but was way lower than $6.8 billion a year ago. Further, even oil imports rose to $15 billion in October from $13.19 billion in September due to rise in fuel consumption. Indias ballooning trade deficit has been a key contributor of Current-Account Deficit, which widened to a record 4.8% of Gross Domestic Product (GDP) in the last fiscal year and in turn weighed on the rupee currency, raising concerns on how the country would manage to finance the current-account shortfall once the U.S. Federal Reserve begins unwinding its easy-money policies. However, the government in the past has taken slew of measures to clamp down its gold imports as well boost exports, which in turn has brought back the trade deficit to manageable levels. Nevertheless, with the rise in gold imports again, Economist Pronob Sen underscored that although the core gold demand will continue, higher exports will also remain sustainable on lower base. Source : money.livemint
Posted on: Mon, 11 Nov 2013 10:20:16 +0000