Contrary to some conservative projections, Assocham on Monday said it expects India’s trade deficit to increase sharply by over 40 per cent to $262 billion in the current fiscal in the face of exports facing headwinds in the western markets.
If the trade scenario unfolds, as per the Assocham projections, the rupee would come under further pressure. The Indian currency has already lost over 20 per cent against the US dollar in the last one year.
“Out of different possible scenarios..., the most likely would be one where imports grow by 25 per cent and exports increase by about 15 per cent. This would leave the country with a balance of trade (BoT) of $262 billion,” said Mr Rajkumar Dhoot, President, Assocham.
In such a scenario, exports would grow up to $348 billion but imports would sharply increase to $610 billion.
The chamber came out with these numbers, days ahead of Commerce and Industry Minister, Mr Anand Sharma taking a meeting of all the export promotion councils to assess the export prospects in a difficult global market.
In 2011-12 fiscal, India’s merchandise imports totalled $488 billion against exports of $303 billion, leaving a trade gap of $185 billion.
High crude oil prices and rising gold and silver imports contributed to 32 per cent import growth in the last fiscal.
Import on these two counts itself was a whopping $217 billion, accounting for over 44 per cent of the country’s total import bill.
Against the backdrop of weak recovery in the US economy and continuing troubles in the European markets, the crude oil imports would continue to remain the biggest import item this fiscal, said Mr Dhoot.