India’s vehicle sales growth is expected to remain in the negative in the current fiscal year ending March 2014, an industry body executive said on Tuesday, despite car sales rising for the first time in 10 months in August.
Car sales in India rose 15.4 per cent in August, as top carmaker Maruti Suzuki’s sales surged on a lower base, but slower economic growth, high fuel and interest costs weighed on demand.
Earlier this month, Tata Motors and Mahindra and Mahindra Ltd said domestic sales tumbled in August on rising fuel costs and interest rates, and the industry looks set for more pain as a sharply weaker rupee hits profit margins during key sales months ahead.
August trade deficit shrinks as exports rise
India’s trade deficit narrowed to $10.9 billion in August, helped by a double digit rise in merchandise exports, provisional government data showed on Tuesday, offering some respite for the troubled rupee currency.
Merchandise exports rose 12.97 per cent in August to $26.14 billion from a year earlier. Imports fell 0.68 per cent year-on-year to $37.05 billion.
“We are closing the trade gap,” Trade Minister Anand Sharma told reporters at a press conference.
The rupee has been hammered down in a sell-off in emerging currencies as foreign investors readjust their exposure to markets like India, anticipating higher interest rates in the United States.
The rupee hit an all-time low of 68.85 against the dollar last month on concerns over New Delhi’s ability to fund its bloated trade deficit.