India’s trade deficit remained stagnant at about $13 billion in April, compared to the year-ago period, after touching a record high of $185 billion, or 10 per cent of the gross domestic product (GDP), in 2011-12. If this trend persists, the current account deficit, which had touched four per cent of GDP in the first nine months of the previous financial year, may be narrowed.
Exports rose just 3.2 per cent to $24.5 billion in April, against a growth of over 31 per cent in the same month last year, according to initial figures released by Commerce Secretary Rahul Khullar.
Slackening demand abroad weighed more heavily than the falling rupee, while sectors like textiles reeled under a plethora of problems. The jems & jewellery segment saw disruption due to protests over Budget proposals. Engineering exports, however, rose 14.2 per cent.
Imports, too, rose by a meagre 3.8 per cent to $37.9 billion in April, against 15.77 per cent in the year-ago period. This was the slowest import growth since October 2009, when growth in imports stood at $25.9 billion. While petroleum products imports rose just seven per cent to $13.9 billion due to falling global crude oil prices, pearls and precious stones and gold and silver imports contracted. Trade deficit rose to $13.4 billion, against 13 billion in April, 2011. The Federation of Indian Export Organisations said the contraction in textile export growth and low expansion in outbound shipment of a few labour-intensive sectors did not augur well for employment generation, and could even lead to lay-offs.
