Macroeconomic indictors - India trade deficit seen at all time high
With imports rising at a scorching over 33% but exports losing steam in April to August, India seems to be heading for an all time high trade gap of USD 135 billion this fiscal.
India's trade deficit difference between imports and exports in April to August of 2010-11 is USD 56.6 billion. Mr Rahul Khullar commerce secretary told reporters that "This comes to roughly a trade deficit of USD 11.2 billion per month and that comes to USD 135 billion for the fiscal. Now that will be very very large.”
The estimated trade gap in 2009-10 was USD 102 billion and for 2008-09 at USD 118 billion.
In the first five months of the fiscal, while exports grew by 28.6% to touch USD 85.27 billion, imports increased at a faster rate of 33.2% to total USD 141.89 billion. The trade gap in April to August 2009-10 was USD 38.17 billion.
Mr Khullar said that "We have concerns primarily about the size of deficit. At the pro rata basis close to USD 135 billion trade gap (in 2010-11) is much higher. So therefore a matter of concern.”
The Secretary though added that the gap is manageable. Though trade gap can impact India's current account position, the services exports would compensate for it.
With the economy growing at a healthy rate of over 8.5 per cent, both imports and exports would also reach record levels.
Economists, however, see the rising imports as a sign of increasing commercial activities in the country.
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