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Feb 13, 2013, 05.25 PM IST | Source: Moneycontrol.com

Trade: Imports reach a record-high in January 2013

CRISIL Research has come out with its report on "trade data of January 2013". According to the research firm, merchandise exports are expected to recover somewhat going forward due to an improved global outlook in 2013.

CRISIL Research has come out with its report on "trade data of January 2013". According to the research firm, merchandise exports are expected to recover somewhat going forward due to an improved global outlook in 2013.

Exports growth after a gap of eight months returned to positive territory and grew by 0.8 per cent in January 2013. However, imports clocked a growth of 6.1 per cent and reached an all-time high of $ 45.6 billion in January 2013 due to higher oil import bill. As a consequence, India’s trade deficit, after narrowing to $17.7billion in December 2012, again swelled to $20.0 billion in January 2013, an increase of 13.8 per cent on y-o-y basis.

On a cumulative basis, during Apr-Jan 2012-13, exports were at $ 239.6 billion, down 4.9 per cent on y-o-y basis, while imports at $ 406.9 billion were at the same level. This resulted in trade deficit for Apr-Jan 2012-13 coming in at $167.2 bn as against $154.9 billion in the same period last year. The increased trade deficit has put pressure on India’s widening current account deficit.

Due to a slowdown in the economy, while the non-oil imports for the cumulative period of Apr-Jan 2012-13 is showing a contraction of 5.2 per cent , the oil imports shows no such decline. On the contrary, oil imports during April-January, 2012-13 were 11.6 per cent higher than the corresponding period last year. The Brent crude oil prices lately have moved up to $120 a barrel but are expected to come down to an average $ 95 -100 per barrel during the next fiscal. However, without reforming the fuel subsidy regime keeping the oil import bill under control would be difficult. In this regard, deregulation of diesel prices is a step in the right direction and in conjunction with lower crude prices should keep the import bill lower next fiscal. On the other hand, we expect merchandise exports to recover somewhat going forward due to an improved global outlook in 2013. Thus, CRISIL Research does not expect the trade/ current account deficit as a percentage of GDP to widen further in 2013-14.

Disclaimer: CRISIL Limited has taken due care and caution in preparing this Report. Information has been obtained by CRISIL from sources, which it considers reliable. However, CRISIL does not guarantee the accuracy, adequacy or completeness of any information and is not responsible for any errors or omissions or for the results obtained from the use of such information. CRISIL Limited has no financial liability whatsoever to the subscribers / users / transmitters / distributors of this Report. The Centre for Economic Research, CRISIL (C-CER) operates independently of and does not have access to information obtained by CRISIL's Ratings Division, which may in its regular operations obtain information of a confidential nature that is
not available to C-CER. No part of this Report may be published / reproduced in any form without CRISIL's prior written approval.

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