India's trade deficit is seen at $185 billion in the 2011/12 fiscal year on higher crude import bill, the trade minister said citing provisional data, which may worsen the country's current account balance and further weaken the rupee.
The trade deficit is primarily because of the crude oil prices. Full-year exports have topped $300 billion, exceeding the target of around 20 percent export growth set by the government despite a slowdown in the major export destinations such as the United States and Europe.
The imports have surged to $485 billion during April-March, a jump of 38.2 percent from the previous year. Apart from the crude bill, gold imports of nearly $59 billion have also helped widen the trade deficit. Compared to 2010/11, Indian imports rose 21.6 percent from a year earlier to $350.7 billion, while exports grew 37.6 percent on year to touch nearly $246 billion.
With imports far outstripping exports, India's current account gap has steadily widened since last April. In the three months to end-December, current account deficit widened to 4.3 percent of the GDP from 4.1 percent in the previous quarter. New Delhi has projected the deficit for 2011/12 to be 3.6 percent of the GDP.
Asia's third-largest economy imports nearly 80 percent of its crude oil needs, leaving it vulnerable to the vagaries of the oil market.With the global economic recovery remaining fragile, outlook for Indian merchandise exports, for which the United States and Europe are the key markets, remains uncertain.
The deterioration in the current account deficit is expected to pile pressure on the rupee, which fell nearly 16 percent against the U.S. dollar in 2011 before recovering somewhat this year, making it more reliant on volatile capital inflows to fund the gap.
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The trade deficit is primarily because of the crude oil prices. Full-year exports have topped $300 billion, exceeding the target of around 20 percent export growth set by the government despite a slowdown in the major export destinations such as the United States and Europe.
The imports have surged to $485 billion during April-March, a jump of 38.2 percent from the previous year. Apart from the crude bill, gold imports of nearly $59 billion have also helped widen the trade deficit. Compared to 2010/11, Indian imports rose 21.6 percent from a year earlier to $350.7 billion, while exports grew 37.6 percent on year to touch nearly $246 billion.
With imports far outstripping exports, India's current account gap has steadily widened since last April. In the three months to end-December, current account deficit widened to 4.3 percent of the GDP from 4.1 percent in the previous quarter. New Delhi has projected the deficit for 2011/12 to be 3.6 percent of the GDP.
Asia's third-largest economy imports nearly 80 percent of its crude oil needs, leaving it vulnerable to the vagaries of the oil market.With the global economic recovery remaining fragile, outlook for Indian merchandise exports, for which the United States and Europe are the key markets, remains uncertain.
The deterioration in the current account deficit is expected to pile pressure on the rupee, which fell nearly 16 percent against the U.S. dollar in 2011 before recovering somewhat this year, making it more reliant on volatile capital inflows to fund the gap.
....more info