Monday, November 11, 2013

October trade deficit widens; exports bring some respite

Two weeks after the finance minister P Chidambaram announced that the current account deficit was coming under control, the data on trade deficit for October moved in contrast, registering a sharp jump to $10.56 billion. The deficit in September was $6.7 billion.

Trade experts, however, believe that the spurt was on expected lines on account of Diwali festival which spurred gold purchases leading to higher bullion exports.

Gold and silver imports rose to $1.37 billion in October compared with $800 million in the previous month. However, overall imports fell 14.5 % year on year to $37.83 billion.

India has set a target of $325 billion for 2013-14 and the commerce secretary, S R Rao said he was confident of achieving the target.

"All major sectors having significant contribution to export basket have shown a positive trend," said Rao.

Exports during October, 2013 were valued at $272.70 billion, an increase of 13.47% as compared to $240.32 billion in the corresponding period last year. Cumulative value of exports for the period April-October 2013-14 was $1793.76 million as against $1687.06 billion for the corresponding period last year, registering a growth of 6.32 %.

Imports during October came down by 14.50% at $378.27 billion, as compared with $442.43 billion in October 2012. Cumulative value of imports for the period April-October, 2013-14 was $2,700.58 billion as against $2,807.37 billion registering a negative growth of 3.80 % for the corresponding period last year.

Two weeks ago, Chidambaram had lowered CAD estimates for 2013-14 to $60 billion from the earlier projection of $70 billion set at the time of budget.

Falling imports and rising exports were cited behind the positive outlook on CAD.

Industry chamber Ficci responded positively to the October data. "Steady rise in exports and significant reduction in trade deficit during the first seven months of this fiscal augur well for the economy," said Ficci president, Naina Lal Kidwai.

Federation of Indian Export Organisation said, "Exports will post even better results in forthcoming months as all major sectors of exports are in positive zone."
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