Trade deficit widens to $20.1 billion on high gold imports

New Delhi, June 17 (IANS) India’s trade deficit widened to $20.14 billion in May on higher gold imports, putting further pressure on the country’s current account balance, official data showed Monday.

The country’s exports declined by 1.11 percent to $24.50 billion in May, while imports jumped by 6.99 percent at $44.64 billion, Commerce Secretary S.R. Rao said at a media briefing here.

The cumulative value of exports for the first two months of the current financial year is $48.67 billion, as against $48.56 billion posted during the same period last year, registering a marginal increase of 0.21 percent.

Imports jumped by 8.88 percent at $86.60 billion in the April-May period.

For the fist two months of the current financial year, the trade deficit widened to $37.93 billion, as compared to $30.97 billion registered during the same period of last year.

Rao said trade deficit has widened largely due to higher imports of gold and silver, which surged by nearly 90 percent in May year-on-year. In April, gold imports had more than doubled.

“The added deficit in the balance of trade for cumulative period of April-May is largely contributed by additional imports of gold and silver,” Rao said.

Oil imports during May, 2013 were valued at $15.02 billion, 3.05 percent higher than oil imports valued at $14.57 billion recorded during the same month last year.

For April-May period oil import grew by 3.47 percent at $29.10 billion.

Non-oil import was valued at $29.62 billion in May, registering an increase of 9.10 percent year-on-year.

Reacting on the monthly data, president of Federation of Indian Export Organisation (FIEO) M. Rafeeque Ahmed said it was indicative of a continued sluggishness in the global trade.

“We have seen few green shoots in countries like the US and Japan but Euro area continues to be a cause of concern,” Ahmed said.

He said in some other large economies like China, Brazil, Russia and South Africa, sluggish external demand and lack of investment are pulling down economic activities.

“Rupee depreciation has not pushed exports as demand is low, other currencies are also depreciating, import intensity of exports are on increase and high inflation is pushing input costs,” Ahmed said.

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