Trade deficit swells

On the back of rising oil import bill, India’s trade deficit has gone up by 42.2% to $49.13 billion during April-August 2008-09, from $34.54 billion in the same period last year. The trade deficit in August has increased by over 93% to $13.94 billion as against $7.19 billion August last year. The crude oil import bill in April-August 2008 went up by 59.6% to $45.97 billion from $28.80 billion in the corresponding period last year. In August, the oil import bill rose 76.7% to $10.96 billion from $6.20 billion in August 2007.India’s exports surged 27% in August to $16 billion. But as the import also increased by 51% to $29.95 billion, the trade deficit further widened, according to official figures released on Wednesday.Federation of Indian Exports Organisation (FIEO) President Ganesh Gupta said: “Going by the way the trade deficit is growing, the gap may cross $125 billion by the year-end.’’ While, exports for the April-August 2008 grew 35.1% to $81.22 billion, the imports increased by 37.7% to $130.36 billion.However, the healthy growth in the exports suggest that the country is on the way to achieve the $200 billion target for the current fiscal. Non-oil imports during August, 2008 were estimated at $18.98 billion—39.6% higher than that of $13.60 billion in August, 2007. Non-oil imports during April-August, 2008 were at $84.40 billion which was 28.2% higher than $65.85 billion in April-August, 2007.The depreciation of rupee in the last two months, however, experts say, will help exporters. While exports will surge, imports will become costlier. Gupta said: “It is definitely adding to the profitability of exporters...but they are not in a position to factor the same in their costing and competitiveness in view of the sharp fluctuation in exchange rate.’’