New Delhi: Subdued import of gold and silver pulled down the trade deficit in June to USD 12.2 billion despite 4.56 percent contraction in exports during the month.
Gold and silver imports dipped to USD 2.45 billion in June from USD 8.4 billion in the previous month. However, as compared to June 2012, the imports grew by 22.8 percent.
Trade deficit had widened to a seven-month high of USD 20.1 billion in May.
"The decline in gold and silver imports can be attributable to the steps taken by government specially by the RBI in May and June by which gold imports for domestic use was discouraged. I think that might have translated into lower imports of gold," Director General of Foreign Trade (DGFT) Anup Pujari told reporters here.
Imports declined marginally by 0.37 percent to USD 36 billion during the month. Exports stood at USD 23.79 billion against USD 24.9 billion in June 2012.
Pujari said that global demand has still not recovered and there was fall in Chinese and Japanese exports too.
The chairman of trade promotion body EEPC India, Aman Chadha, said that the two largest markets EU and the US are not supporting. "We have to urgently devise a strategy to reach out to newer markets in Africa and Latin America."
Oil imports in the month grew by 13.74 percent to USD 12.76 billion, compared to USD 11.22 billion in June 2012. Non-oil imports declined by 6.7 percent to USD 23.2 billion.
Petroleum exports too grew by 4.42 percent to USD 4.34 billion from USD 4.15 billion in June 2012.
For the April-June period this fiscal, exports were down by 1.41 percent at USD 72.45 billion over the same period last year. However, imports during the period were up by 5.99 percent at USD 122.6 billion.
The sectors which witnessed substantial decline of over 20 percent in overseas shipments include iron ore (33 percent), gems and jewellery (26 percent) and spices.
Iron ore and gems & jewellery exports declined to USD 87 million and USD 3.4 billion in June from USD 130 million and USD 4.6 billion in the same period last year respectively.
However, marine products exports jumped 36 percent, rice by 28 percent and chemicals by 21 percent.
Besides, gold and silver, precious stones, wood and wood products, news printing, cotton (raw and waste) and fertiliser recorded over 20 percent jump in imports in June.
Federation of Indian Export Organisations (FIEO) President Rafeeque Ahmed said: "There is a need to make manufacturing competitive to support exports. There is strong linkage in manufacturing growth and exports."
China posted a negative growth of 3 percent in exports in June, he added.