India’s trade deficit slightly narrowed for April compared with last month, according to a report released by the Ministry of Commerce and Industry. The trade deficit for April was estimated at $10.99 billion which was higher than the deficit of $10.09 billion during April last year.
Exports continued their dismal performance at the start of this fiscal as the value fell for the fifth straight month to $22.01 billion, a 13.96 per cent drop in dollar terms from April 2014. The value of exports depreciated 10.55 per cent in rupee terms.
India had a dismal trade balance last year as exports declined further and missed the target set by the government. The exports have been languishing given the sluggish global demand. The situation is unlikely to improve in the coming months as euro zone, Japan and China are likely to pull down growth further.
Imports also depreciated 7.48 per cent in dollar terms. Oil imports during April were valued 42.65 per cent lower than the corresponding period last month while non-oil imports increased 12.58 per cent higher in value. Non-oil imports during April 2015 were estimated at $256.04 billion.
Oil imports can prove to be a nuisance for the Indian economy as crude prices have started rising again. Futures for brent crude crossed $69 per barrel mark a fortnight ago and a further rise can widen the trade balance further. No recovery in exports is expected to accentuate the situation.
The New Foreign Trade Policy 2015-2020 has set a goal for doubling India’s merchandise and service export to $900 billion.