Goods trade deficit in December, 2017 widened to $14.9 billion from $10.5 billion in December 2016 as imports outpaced exports, government data showed.
Gold imports in December, 2017 surged 71.52% to $3.39 billion. Imports of petroleum products rose 34.94% to $10.3 billion and those of pearls, precious and semi-precious stones by 94% to $3.46 billion, Commerce Ministry data, released on Monday, showed.
Global Brent (oil) prices (U.S. dollar/barrel) increased by 18.75% in December 2017 vis-a-vis December 2016 as per World Bank commodity price data, the Ministry said. They were among the factors leading to overall imports for December increasing by 21.12% year-on-year to $41.9 billion.
“The rising trade deficit is alarming and the import profile needs to be analysed carefully to see whether imports would augment domestic production or shall pose a challenge for the same,” said G. K. Gupta, president, Federation of Indian Export Organisations (FIEO). The rising import of gold, precious and semi-precious stones can help in the exports of gems and jewellery sector in next few months, he said in a statement. Imports during April-December 2017-18 increased by 21.76% to $338.36 billion while trade deficit during the period widened to $115 billion from $78.4 billion in the corresponding period of the previous financial year.
Meanwhile, exports for the month rose by only 12.36% to $27 billion. The major export segments that performed well included petroleum products (25.1% growth to $3.6 billion), engineering goods (25.32% to $7.3 billion), chemicals (31.3% to $1.9 billion), gems and jewellery (2.4% to $3.2 billion) and drugs and pharmaceuticals (6.9% to $1.7 billion).
“.. positive growth (in exports) for second month in a row, after a fall in October 2017, shows resilience of the Indian exporters. Since we have already achieved exports worth $224 billion in first nine months of the fiscal and global trade growth remains robust in 2018, we are on our course to achieve $300 billion in 2017-18,” Mr. Gupta said.
Referring to the 8% contraction in exports of ready-made garments in December. While decline in exports of minerals is understandable, the similar trend for apparel is extremely disappointing as appreciation of Indian rupee would further blunt the competitive edge of the sector,” he said.Citing problems in getting refund of input tax credit, he said “exporters should be given reasons for the delay and there should be close monitoring of Goods and Services Tax [GST] refund for exports on a day-to-day basis.”
