Foreign Trade export rises sharply but deficit too increased

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Foreign Trade export rises sharply but deficit too increased
India's exports went up by 81.79% to $29.3 billion over the previous year (year-on-year, yoy) in July. It managed to achieve this level despite uncertain economic conditions in the US and Europe.

The imports for the month was at 51.5% to $40.4 billion from $26.6 billion in the same period last year (yoy). Therefore the deficit between the two trades exports-imports stood at $11.1 billion.

Engineering, petroleum products, and gems and jewelery exports stood at $8.7 billion, $4.6 billion and $ 3.5 billion, respectively.

Oil imports increased by 37% to $11.44 billion yoy. Where as non-oil imports too grew by 58.12% to $28.98 billion during the same period.

Rahul Khullar, Commerce Secretary, had said to the media that high growth rate for exports is unlikely to sustain in the coming months due to uncertainty in the US and European economies. He rather made a point that India "would be lucky" to achieve 20% exports growth in current financial year.

Uncertain economic conditions in the US and Europe are likely to hit global demand. Together, these countries account for about 35% of the country's exports.

April-July period saw exports grow by 53.98% to $108.34 billion yoy. Meanwhile comparing the first four-month of the fiscal reveals that imports grew by 40% to USD 151 billion. The trade deficit during the period stood at $42.6 billion.

During April-July this fiscal, oil imports rose by 22.72% to $41.97 billion. Non-oil imports up by 48.03% to $109.06 billion from $73.68 billion in April - July, 2010-11.

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