Indian exports increased by 1.6 per cent in April, recording its fourth consecutive growth. Trade deficit however continued to widen unabated and grew to $17.7 billion, coming at the back of a surge in gold imports. Gold and silver imports in April showed a significant increase clocking a 138 per cent growth to $ 7.5 billion from $3.1 billion in April, 2012.
The government, specifically the finance ministry, has been pushing to curb the growing gold imports.
“Imports have seen an undue growth of 10.9 per cent in April to $41.95 billion, largely contributed by significant increase in gold imports,” S R Rao, Commerce Secretary said here on Monday.
India recorded exports of $24.16 billion in April as compared to $23.7 billion in the corresponding period last year. “Government sees this growing trade imbalance with concern and would be taking into stock this heavy import of gold and would come out with considered steps as how to contain growing trade deficit,” Rao observed.
After touching a record high of $20 billion in January, the trade gap reduced to $14.9 billion in February and $10.3 billion in March.
Director General of Foreign Trade (DGFT) Anup Pujari said that the sharp drop in prices didn’t allow the increased gold duty to have an impact. “Gold imports have been so much; it is not an accepted thing. In fact all of us must have been taken it by surprise,” Pujari said.
Import of crude oil, metals and scraps and chemicals increased by 4%, 52 per cent and 23 per cent respectively.
The Commerce Secretary added that the lack of alternative investment options and the inflation-proof quality of gold had pushed its import.
In April, oil imports stood at $14 billion as compared to $13.5 billion in corresponding period last year. Non-oil imports rose by 14.9 per cent to $27.86 billion in April.
Sectors such as rice, gems and jewellery, readymade garments, cotton, tea and marine products recorded positive export growth while petroleum, engineering, chemicals, man-made yarn and pharmaceuticals posted negative growth.
“The US is looking good.
The economy is picking up but not so in Europe. Latin America, Africa and far east nations continue to do well,” Rao said adding that the Reserve Bank of India’s move to provide easy credit to exporters would further encourage exports.
“We do see a positive curve out of dollar-denominated credit being available to exporters,” Rao said.
The government has set a goal of $ 325 billion for exports for 2013-14 while exports reduced to 1.76 per cent to $300.6 billion in the last fiscal.
“Fourth straight growth in exports on month-on-month basis augurs well for the country...
The rising gold imports is a cause of concern but the softening in gold prices is a good news and will help in reducing imports value-wise but there is a need to evaluate rising volume-wise gold imports,” said M Rafeeque Ahmed, President, Federation of Indian Export Organisations (FIEO).