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 Indian trade deficit narrows to $12.24 billion in June

Easing pressure on the current account balance, India’s trade deficit narrowed in June to $12.24 billion from a 7-month high, as compared to $20.1 billion a month ago mainly on the back of slowdown in gold imports. The overall trade deficit for April-June 2013 was estimated at $ 50.18 billion which was higher than the deficit of $42.21 billion during same period last fiscal.

India’s exports contracted by 4.6 per cent, for the second consecutive month, to $23.79 billion in June 2013 compared to that in the year-ago period. Moreover, on cumulative basis, value of exports for the period April-June 2013 was $72.45 billion, as against $73.49 billion, registering a negative growth of 1.41 per cent in Dollar terms over the same period last year.

Imports too declined marginally by 0.37 per cent to $36 billion in the month as against $36.16 billion in June 2012. While, on the cumulative basis, imports for the period of April-June 2013 was at $122.63 billion as against $115.70 billion, registering a growth of 5.99 per cent in Dollar terms over the same period last year.

Meanwhile, Oil imports in June grew by 13.74 per cent to $12.76 billion from $11.22 billion in the same period last year. On the other hand non-oil imports declined by 6.7 per cent to $23.2 billion.

Meanwhile, gold become the second biggest item in the country’s import basket, after crude oil, on the back of enormous demand from Indian customers. In a bid to trim down gold demand, Indian government took slew of measures including a 2 percentage point hike in import duty which appeared to have worked as the growth in gold and silver imports slowed to 22.8% year-on-year at $2.45 billion last month. Gold and silver imports had jumped an annual 109% in April and May combined as retail buyers tried to take advantage of sliding global prices.