India's trade deficit widened to $20 billion in January from $17.7 billion in December, as the imports rose at a sharper rate than the exports, according to the data released by the Ministry of Commerce Wednesday.
Exports rose marginally by 0.8 percent annually – first time since June 2012 – to $25.59 billion in January, while imports for the month rose 6 percent to $45.58 billion, a senior trade ministry official said.
The cumulative values of total exports for the April-January period stood at $239.7 billion, down 4.9 percent from $251.9 billion registered in the corresponding period a year ago.
The value of imports for the period of April-January totaled to $406.9 billion, against $406.8 billion registered in the year ago period, indicating a marginal increase of 0.01 percent.
Oil imports in January stood at $15.9 billion, up 6.91 percent compared to $14.9 billion in the corresponding period last year. Non-oil imports in January rose 5.71 percent to $29.7 billion, compared to $28.1 billion in the same period last year.
Oil imports for the April-January period stood at $140.4 billion, while non-oil imports for the same period was at $266.4 billion.
Exports in India has been falling in the past year owing to the weak global demand, while imports – lead by fuel and gold – shot up most of the months in the fiscal year. Concerned with the widening current account deficit, owing to surging gold imports the Indian government discouraged investments in gold by raising the duties. Mounting fuel import bill is another major worry for the government.
"The oil import bill is definitely a challenge, but for a growing economy, energy needs have to be met," Commerce and Industry Minister Anand Sharma said at an event in Mumbai, Reuters has reported.
Although the minister had expressed hope for the trade deficit to narrow down in Jan-March 2013 quarter, many analysts expect the current account deficit to be around 4.5-5.0 percent of GDP in 2012/13, higher than 4.2 percent previous year.
"The high current account deficit is unsustainable as it can't be funded for a long time with capital flows and it will get adjusted through the exchange rate," A Prasanna, economist, ICICI Securities Primary Dealership told Reuters. "The exchange rate will depreciate when the correction happens."
US-India trade in 2012 Crosses $62 Billion
U.S.-India trade in merchandise goods for the year 2012 (January-December) stood at $62.85 billion registering an increase of 9.66 percent over the corresponding period a year ago, a report issued by the Indo-American Chamber of Commerce showed.
The U.S. exports to India rose by 3.88 percent from $21.5 billion to $22.34 billion while the U.S. imports from India surged by 13 percent from $36.15 billion to $40.85 billion during the year 2012, with a balance of trade surplus of $18.18 billion in favor of India.
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