India Trade deficit update status.

 

    Trade Deficit is always concerning for India. The concerning part is that it is increasing every year. Although Government has taken so many steps for making Export successful it is falling short of expectation. After the huge growth rate in the first few months of FY12 the Export has moderated.  India has registered Export of US$25 Billion in the Month of December 2012. This is growth of around 6.7% YOY. This is much better as compared to November when it had touched two year low. Import stood at US$37.8 Billion registering a growth of 20%.For the 9 month period April to December Trade Deficit stood at US$133.2 Billion. This year in addition to Crude Oil Import Gold Import has also increased substantially. Due to this Government has recently increased the Custom Duty on Gold by changing it from fixed INR 300 per 10 gram to 2% of the Value. Let us see how this step of Government will reduce Gold Import to India. Petroleum Products has also constituted a major part of the Indian Export and has grown by 55% in addition to Engineering Goods which has grown by 22% during the first 8 Months of FY12. Other sectors which are doing well in Exports are Gems & Jeweler, Readymade Garments and Pharmaceuticals. In the Import side Import of Crude Oil has increased by 40% and that of Gold and silver has increased by 54%. Other Products whose Import has increased are Coal, Electronics & Machinery. The Export in FY13 may not grow more than 20% due to prolonged Europe crisis