Published on Thu, Feb 09, 2012 at 12:50 | Source : Moneycontrol.com
Updated at Thu, Feb 09, 2012 at 16:00
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FY13 will be tough for exports
With trade deficit widening to USD 148.5 billion deficit, there seems no let up in concerns surrounding the government balance of trade. The country's January imports stood at USD 40.1 billion while exports stood at USD 25.4 billion, marking a trade deficit of USD 14.7 billion in January alone
With trade deficit widening to USD 148.5 billion deficit, there seems no let up in concerns surrounding the government balance of trade. The country's January imports stood at USD 40.1 billion while exports stood at USD 25.4 billion , marking a trade deficit of USD 14.7 billion in January alone, according to commerce secretary Rahul Khullar. The deficit in the April-December period stood at USD 133.8 billion.
The rift in the current account deficit, an accepted measure of trade flows, will widen further in the year ending March, according to government reports. The import bill is likely to go up to USD 461 billion in FY 12, while exports is expected to halve to USD 297 billion. This will have a severe impact on rupee, currently Asia's best performing currency, and impact the nation's bonds. The currency has rebounded sharpely to from its Decemeber 2011 lows.
Going forward in FY13, exports will tread a rough patch owing to Europe's sovereign-debt crisis. A big chunk of our exports, including gems and jewelry, textiles, engineering goods, chemicals, leather manufactures and services are linked to Europe.
Rising commodity price is a major contributor to our balooning deficit. India is heavily dependent on oil imports for its energy needs. With crude prices rising above USD 117 per barrel, it will add on to India's mounting import bill.
