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Trade deficit fell to a 30-month low in September to $6.7 billion, thanks to a sharp drop in imports.
Imports plummeted by 18.10 per cent to $34.43 billion primarily due to lower crude oil and gold imports. Exports during the month rose 11.15 per cent to $27.64 billion.
“The measures for restricting non-essential imports have played out extremely well. These need to be continued for the rupee to be stronger,” Commerce Secretary S. R. Rao said.
Gold imports fell 82 per cent to $0.8 billion from $4.5 billion in the year-ago period. Apart from the import duty hike, lack of clarity on the RBI’s gold import norms served as a deterrent to import of the yellow metal.
Oil imports in September declined 5.94 per cent to $13.19 billion, while non-oil imports declined 4.55 per cent to $149.35 billion.
Hiking import duties on gold, silver and platinum and restricting import of LCD televisions are among measures the Government took recently to check the widening current account deficit and the falling rupee
More measures, including increasing import duties on electronic items, are under consideration.
India’s current account deficit rose to 4.9 per cent of GDP in the second quarter of the current fiscal, intensifying concerns over how it would be financed. The Government is trying to get the rupee to below 60 to the dollar to contain the deficit. The rupee hit record lows in August, has since been in the 61-63/$ range.
With exports growing at double-digits for the third consecutive month, the Commerce Department is now confident of reaching the $325 billion export target for the current fiscal, Rao said. Engineering exports, which had not been performing well in the previous months’, posted a year-on-year growth of 15.22 per cent to $5.2 billion in September. Gems and jewellery is the only sector that is lagging, but here, too, a month-on-month analysis of exports shows a rising trend, a Commerce Ministry official said.
During the first six months of this fiscal (2013-14), while exports rose 5.14 per cent to $152 billion, imports fell 1.8 per cent to $232.23 billion.
Trade deficit in the first half of the current fiscal at $80.12 billion was lower than the $91.81 billion recorded in the same period last fiscal.
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