Sharp rise in gold imports continues to worry policymakers
India’s trade deficit touched a seven-month high of $20.1 billion in May compared with $16.9 billion in the same month last year as gold, silver and crude oil imports continued to rise, pressuring the current account deficit.
Goods exports declined 1.1 per cent to $24.51 billion in May compared to the same month a year ago.
Imports during the month increased 7 per cent to $44.65 billion primarily of gold and silver which rose 89.7 per cent over the year ago period to worth $8.3 billion.
The fall in exports, the first time this calendar, was because of continued uncertainty in the global market, especially the European Union, and the restriction on gold exports from Special Economic Zones, Commerce Secretary S. R. Rao said at a press conference on Monday. Rao said the $800-million fall in gold exports in May was largely due to the ban on gold trading and the minimum value-addition norms for gold and jewellery for SEZ units.
He, however, refused to comment on how the restrictions on gold imports, including higher import duties, would affect imports, and said that this would be clear next month.
Increase in textile and garment shipments contributed to exports rising in April-May by 0.27 per cent to $48.67 billion. Imports during the two-month period increased 8.88 per cent to $86.60 billion while the balance of trade worsened to $37.9 billion.
Crude oil and non-oil imports in May grew 3 per cent and 9.1 per cent to $15 billion and $29.62 billion.