Exports grew for the fourth consecutive month, recording a growth of 1.6 per cent in April, but surge in gold imports pushed up the trade deficit to $17.7 billion. Exports in April stood at $24.16 billion as against $23.7 billion in April, 2012.
Gold and silver imports, during the month under review, had more than doubled to $7.5 billion from $3.1 billion in April, 2012.
“Imports have seen an undue growth of 10.9 per cent (in April to $41.95 billion), largely contributed to by a significant increase in gold imports,” Commerce Secretary S. R. Rao told reporters here.
Expressing concern over the ballooning trade deficit, Mr. Rao said that government would take steps to bridge the gap.
“Government sees this growing trade imbalance with concern and would be taking into stock this heavy import of gold and would come out with considered steps as how to contain this growing trade deficit,” he added.
After touching the second highest figure-ever in a month in January to $20 billion, the trade gap came down to $14.9 billion in February and to $10.3 billion in March.
On the steps to discourage gold imports, Director-General of Foreign Trade Anup Pujari said the government had imposed certain duty but the steep fall in prices had neutralised its impact.
“... gold imports have been so much, it is not an accepted thing. In fact, all of us must have been taken it by surprise,” he added.
Besides, gold and silver, imports of crude oil; metals and scraps and chemicals grew by 4 per cent, 52 per cent and 23 per cent, respectively.
After declining for consecutive eight months from May 2012, India’s exports entered the positive zone in January, 2013.
Mr. Rao said the absence of alternative avenues of investment was also pushing demand for gold upwards.
“It is an inflation-proof investment for a citizen. If economic growth picks up, and better avenues for investment (appear), then the consumer behaviour shifts,” he said. Mr. Pujari said during Akshaya Tritiya festival people bought more gold.
Oil imports in April stood at $14 billion as against $13.5 billion in April 2012. Non-oil imports grew by 14.9 per cent to $27.86 billion during the period.
On export growth, Mr. Rao said shipments were showing continuous positive up-tick. Sectors which registered positive export growth include rice, gems and jewellery (22 per cent), ready-made garments (8.6 per cent), cotton (8.1 per cent), tea (5.4 per cent) and marine products (25 per cent).
Sectors which registered negative growth include petroleum (0.5 per cent), engineering (8.6 per cent), chemicals (1.4 per cent), manmade yarn (3.3 per cent) and pharmaceuticals (1.6 per cent).
Mr. Rao said the positive growth trend was expected to continue in the coming months as new markets were performing.
“The U.S. is looking good. The economy is picking up but not so in Europe. Latin America, Africa and Far East nations continue to do well,” he added.
He also said that the RBI’s proposed steps to facilitate easy availability of credit to exporters, if accepted, would help in boosting exports. “We do see a positive curve out of dollar-denominated credit being available to exporters,” he added.
The government has fixed a target of $325 billion for exports during the current fiscal. In 2012-13, shipments declined 1.76 per cent to $300.6 billion.
In 2012-13, the trade deficit touched a record high level of $191 billion. Federation of Indian Export Organisations President Rafeeque Ahmed expressed concern over rising gold imports, and said there was is a need to evaluate the situation.