Driven by a sharp fall in oil prices, India's trade deficit contracted to a 17-month low of $6.9 billion in February as imports shrank at a faster pace than exports. Exports fell 15% to $21.6 billion compared with $25.4 billion a year ago, the commerce department said on Friday.Imports were down 15.7% to $33.7 billion.
Lower price of crude meant that petroleum product exports fell almost 55% from $4.6 billion in February last year to $2.1 billion.This didn't only result in the share of petrol and diesel and other products in India's export basket falling from over 18% to a shade under 10%, but also resulted in a change in the pecking order. While engineering exports ($5.1 billion) remained the top-most item in the basket, gems and jewellery (despite a 3.5% decline to $3.5 billion) overtook oil products to occupy the second spot.
On the import front, the impact of oil price fall meant that there was a temporary relief for policymakers as the value of crude petroleum flowing into the country declined by over 55% to $6.1 billion.There was, however, a 48% jump in gold shipments into the country , which rose to $2 billion in February .
Gold has been a major concern area for the government for over two-and-half years now and had prompted import curbs and an increase in customs duty .While some of the restrictions have been eased, there is still a tight leash over shipments, at least through the legal channels. By keeping tabs on gold imports, the government has managed to reduce the trade deficit, with oil providing a further boost.
The third straight month of decline in exports, however, raised fresh demand for concessions from the industry lobby groups.During April-February , exports went up by 0.9% to $286.7 billion, while imports were 0.7% higher at $411.8 billion, resulting in trade deficit of $125 billion.
Lower price of crude meant that petroleum product exports fell almost 55% from $4.6 billion in February last year to $2.1 billion.This didn't only result in the share of petrol and diesel and other products in India's export basket falling from over 18% to a shade under 10%, but also resulted in a change in the pecking order. While engineering exports ($5.1 billion) remained the top-most item in the basket, gems and jewellery (despite a 3.5% decline to $3.5 billion) overtook oil products to occupy the second spot.
On the import front, the impact of oil price fall meant that there was a temporary relief for policymakers as the value of crude petroleum flowing into the country declined by over 55% to $6.1 billion.There was, however, a 48% jump in gold shipments into the country , which rose to $2 billion in February .
Gold has been a major concern area for the government for over two-and-half years now and had prompted import curbs and an increase in customs duty .While some of the restrictions have been eased, there is still a tight leash over shipments, at least through the legal channels. By keeping tabs on gold imports, the government has managed to reduce the trade deficit, with oil providing a further boost.
The third straight month of decline in exports, however, raised fresh demand for concessions from the industry lobby groups.During April-February , exports went up by 0.9% to $286.7 billion, while imports were 0.7% higher at $411.8 billion, resulting in trade deficit of $125 billion.
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