Continuing fall in gold imports narrowed India’s trade deficit to barely $10 billion in April against $18 billion in the same month the previous year. Exports grew 5.26 per cent to $26 billion in said month raising hope that the weak export momentum could be improving. Exports were $24 billion in April, 2013.
Gold imports continued to decline during the month under reference and were down 74 per cent to $1.75 billion. In the same month last year, gold imports were $6.8 billion.
Total imports dipped 15 per cent to $36 billion in April, leaving a trade deficit of $10 billion, according to official data released on Friday.
Prime Minister’s Economic Advisory Council Chairman C. Rangarajan had said in Hyderabad on Monday that the current account deficit (CAD) was likely to be around 2 per cent of gross domestic product in the coming few years due to slowing gold imports, among other factors. “With inflation showing signs of decline and gold prices also not rising, the attraction of gold as an asset is coming down… As we go ahead we should find the demand for gold falling,” he had said.
Gold and silver imports had contracted 40 per cent to $33 billion in 2013-14, or just seven per cent of the total import bill, against 11 per cent in 2012-13, after the government put in place curbs.
Exports had recovered marginally in 2013-14, but, at $312.35 billion, were below the UPA Government’s target of $325 billion. In 2012-13, India’s exports were just above $300 billion.
Federation of Indian Export Organisations (FIEO) chief M. Rafeeque Ahmed said in a statement on Friday that the new Foreign Trade Policy should target to increase exports to at least $750 billion by 2019. “This would require CAGR of 19 per cent per annum, and would need major thrust on manufacturing,” Mr. Ahmed said. Manufacturing sector growth, according to the latest available official data, had decelerated by 3.7 per cent in February compared to the same month in the previous year. The Commerce Ministry has already kicked off meetings to gather feedback on the formulation of the Foreign Trade Policy 2014-19.
