Trade deficit in Jan narrows to $9.9 b

Single-digit growth in exports a prime concern

Trade deficit in Jan narrows to $9.9 b

India’s January trade deficit came in better than expected at $9.92 billion as gold and silver imports dropped drastically by 77 per cent. However, a meagre 3.79 per cent rise in exports caused concern with Trade Secretary Rajeev Kher acknowledging that reaching a $325-billion export target in 2013-14 would be a tough call.

This is the third month in a row that single-digit growth in exports has been reported. But analysts were bullish on the exports outlook in the wake of recovery in the US and global demand picking up.

Exports rose 3.79 per cent compared with the same period last year to $26.75 billion. In December, annual export growth was 3.5 per cent.

Imports fell 18.07 per cent on-year to $36.57 billion. The trade deficit stood at $9.92 billion in January in comparison with $10.14 billion in December.

“Till now, we have achieved $260 billion worth of exports. To achieve $325 billion is a tough call but achievable,” Kher said while briefing the media on trade data.

Director-General of Foreign Trade Anup Pujari said that exports growth has come in single digits because of decline in outbound shipments of major products like gems and jewellery and petroleum.

“Petroleum and gems and jewellery have shown decline in exports. As a result, when my major two things among the top four are showing decline, exports are not going far,” he said.

However, emerging demand conditions in advanced economies, especially the US, which has replaced UAE as India’s number one export destination are encouraging, experts said. In 2012-13, UAE was the number one export destination with $36.3 billion exports followed by the US with exports worth $36.1 billion.

India’s share of exports to the US has increased from 12 per cent in 2012-13 to 12.8 per cent in the April-December period of 2013-14 while the share of UAE declined from 12 per cent to 9.8 per cent during the same period.

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