New Delhi: Despite exports growing by 17.57 per cent in June, India saw its trade deficit, which widened to $16.6 billion in June, surge to a five-year high due to surge in oil prices and a weaker rupee. While overall imports grew at a rate of 21.31 per cent, crude oil imports, which is set to become a headache, rose 56.61 per cent to $12.73 billion. According to the commerce ministry's data, India’s total imports stood at $44.3 billion for the month while the exports stood at $27.7 billion.
However, gold imports in June dipped by about 3 per cent to $2.38 billion.
"Our export focussed initiatives continue to bear fruit," said commerce minister Suresh Prabhu on double digit growth in exports. Federation of Indian Export Organisations (FIEO) president, Ganesh Kumar Gupta said that the exports data for the second month in a row for the fiscal have shown double digit positive growth though the growth have receded during the month.
"MSME units particularly labour-intensive sectors such as RMG of all textiles, agri products, jute manufacturing including floor covering, leather and leather products and gems and jewellery are still showing modest growth or are into negative territory," said Mr Gupta. The FIEO chief said that yet again cushioning has been provided by the petroleum sector, as it not only outperformed all other sectors but has also helped the exports sector to continue on its double digit growth trajectory.
Mr Gupta also expressed his concern on the rising trade deficit, primarily on account of swelling of crude imports bill due to rising global oil prices, which have further added to inflationary conditions and the current account deficit. He added that on domestic front, key issues like access and cost of credit especially for MSMEs should be looked immediately as global challenges and increasing protectionism, have already added to the problems of the exporters. FIEO urges the government to soon come out with WTO compliant export strategy to give a boost to exports sector.