NEW DELHI:India’s trade deficit in May widened to $14.62 billion, recording a four-month high on account of high crude oil import. According to the Commerce Ministry, imports in May surged nearly 14.85 per cent to $42.48 billion, while exports rose by 28.18 per cent to $28.86 billion. Non-petroleum and non-gems & jewellery exports during May 2018 were valued at $19.94 billion as compared to $17.51 billion during May 2017, exhibiting a positive growth of 13.85 per cent.
Exports rose by 5.71 per cent at $25.91 billion in April, mainly by double-digit growth in shipment of engineering goods and pharma products.Trade deficit widened to $14.62 billion from $13.84 billion in May 2017.Oil imports were up 49.46 per cent to $11.5 billion on the back of a surge in international crude prices. Gold imports were also up by 16.6 per cent to $1.18 billion in May.
However, exporters say in future the deficit may rise, if the government fails to address both internal and external challenges for the export sectors.“Credit is a major challenge. Sectors like textile and gems & jewelry are still facing the problem of liquidity as banks and lending agencies have continuously been tightening their lending norms. GST refunds are slow, and because of that, exporters are laying off manpower,” said Ganesh Kumar Gupta, President of the Federation of Indian Exports Organisation (FIEO). Textile export has continued to drop since October 2017. Increasing protectionism from the US and other nations is also hurting Indian exports.
Recently, Bangladesh has imposed 28 per cent import duty on rice to restrict its exports largely from India, which accounts for 18 per cent of India’s rice exports. However, Commerce Minister Suresh Prabhu, who is just back from two days US visit, has assured that the matter will be resolved.
“Officers’ meeting will take place very soon to discuss all pending issues. We have agreed to work on resolution of various issues and address the concerns of either side,” Prabhu told reporters here.On imports, rising crude imports also pose major challenge, alone with weakening Indian Rupee, which experts feel will go up further.
“Assuming an average price for the Indian crude oil basket of $70/barrel, we expect the net petroleum, crude and products import bill to surge to $93 billion in FY2019 from $70 billion in FY2018,” Aditi Nayar, Principal Economist at ICRA said.
$19.94 billion value of non-petroleum and non-gems & jewellery exports
5.71% rise in exports at $25.91 billion in April
49.46% rise in oil imports,pegged at $11.5 billion
16.6% surge in gold imports in May,at $1.18 billion