New Delhi: Rising exports and declining imports in September narrowed the trade deficit to a 30-month low of USD 6.76 billion, which may help to rupee to stabilise after excessive volatility in the past few months.
"Imports have shown a significant fall of 18.1 percent and exports have shown a rise of 11.15 percent in September. The trade deficit is the lowest in the last 30 months," Commerce Secretary S R Rao told reporters here.
While exports of textiles, pharmaceuticals and agriculture recorded decent growth, imports came down mainly on account of a decline in inward shipments of gold and oil.
Imports of gold and silver plunged more than 80 percent to USD 0.8 billion in September from USD 4.6 billion a year earlier. Oil imports declined by about 6 percent to USD 13.19 billion.
"I am confident that import-containment measures put in place for non-essential imports are playing out extremely well and we need to continue this so that our rupee becomes stronger," Rao added.
The rupee has depreciated by about 15 percent since April.
The previous low for the trade deficit was USD 3.8 billion in March 2011. The gap was USD 10.9 billion in August.
Exports and imports in September stood at USD 27.68 billion and USD 34.4 billion, respectively.
During April-September this fiscal, exports grew by 5.14 percent to USD 152.1 billion while imports declined by 1.8 percent to USD 232.23 billion. The trade deficit for the six-month period was USD 80.1 billion.
The Secretary expressed confidence that the export target of USD 325 billion this fiscal would be achieved.
India's trade deficit has been fuelled by high imports of gold and crude oil, contributing to the current account deficit, which has touched an all-time high of 4.8 percent of GDP, or USD 88.2 billion, in 2012-13.
During the first half of this fiscal, gold and silver imports rose 8.7 percent to USD 23.1 billion.
Rao said the import figure for September was the lowest in the past 30 months.
"The government has taken steps to curtail imports of non-essential commodities, particularly precious stones. That is the singular reason for decline in trade deficit," he said.
Oil imports during April-September grew 3.58 percent to USD 82.87 billion. Non-oil imports declined 4.55 percent to USD 149.35 billion. In September, they dipped 24.19 percent to USD 21.24 billion.
Rao said engineering, which contributes the most to the country's exports, has started showing positive growth. Engineering exports rose 15.2 percent to USD 5.2 billion in September, while they declined 0.62 percent to USD 28.07 billion in April-September.
Rao said with the Commerce Ministry having resolved the 80:20 issue, there should be a resurgence in the export of gems and jewellery.
The Reserve Bank of India introduced the 80:20 scheme in July, under which 20 percent of gold purchased from overseas had to be exported to avail of further imports of the metal. The restriction was aimed at curbing the widening current account deficit.
A government official last month said more than 20 percent of the imported metal could be exported, clearing the confusion that had held up inbound shipments at customs.
Gems and jewellery exports in September declined 8.31 percent to USD 3.79 billion. They were down 8.7 percent to USD 20 billion during April-September.
Exports of tea, coffee, spices have come down.
Apparel Export Promotion Council Chairman A Sakthivel said exports may be good this year on the back of a good monsoon, positive manufacturing and a revival in the US economy.
Federation of Indian Export Organisations President Rafeeque Ahmed said exports will touch USD 350 billion this fiscal.
"The trade deficit is likely to come down to below USD 150 billion for this fiscal, which will help the government to keep the CAD within USD 70 billion," he said.
First Published: Wednesday, October 09, 2013, 12:24