India: Trade deficit widens despite buoyant export growth
September 1, 2011
In July, exports totalled USD 29.3 billion, which represents an 81.8% expansion over the same month last year. The buoyant expansion marked the largest year-on-year increase on record and followed a 46.4% rise in June. However, the pace of expansion reflects both sustained exports and a favourable comparison base, as exports had grown a paltry 12.6% in July last year, which was the slowest rate since the end of the recession. That said, the moving three-month sum reached USD 84.5 billion, which was 60.6% higher than in the same period last year. Imports rose to USD 40.4 billion, which marked a 51.5% increase over the same month last year and overshot the 42.5% increase tallied in June. As a result, despite the resilient growth in exports, the trade deficit widened from USD 7.7 billion in June to USD 11.1 billion in July The government has set an export target of USD 500 billion for the fiscal year 2013/14, which is approximately twice the current level of exports.