India's Trade Deficit Widens to a 5-Year High As Imports Increase

As per the official data released by trade ministry on Friday India's trade deficit widened to an over five-year high in the month of June. The 61-month high was driven by high crude oil prices and weakening of the rupee.

The year-on-year rise in merchandise exports by 17.57 percent in the month of June did not compensate for the widening of trade deficit to $16.6 billion from $14.62 billion in the month of May. There was a 56.61 percent rise in oil imports to $12.73 billion.

As the world's third largest importer of crude oil, India's oil import bill increased by the rise in crude oil prices amid concerns of the imposition of tariffs by the US on Iran and a substantial fall in supply from many oil-rich countries.

The trade deficit was further worsened by the depreciating value of the rupee that had hit an all-time low against the US dollar in the month of June.

As per the Ministry of Commerce and Industry's statement, merchandise exports for the last month rose to $27.7 billion from a year ago period, imports, on the other hand, increased by 21.31 percent $44.3 billion from June 2017.
The country's gold imports reduced by 2.8 percent on a year-on-year basis to $2.39 billion in June, the statement further said.