New Delhi, Feb. 13: The country's trade deficit narrowed to an 11-month low of $8.32 billion in January owing to oil imports, which fell 37 per cent to $8.24 billion because of a slump in global crude prices.
Imports declined 11.39 per cent year-on-year to $32.21 billion, while exports fell 11.19 per cent to $23.88 billion.
However, gold imports grew 8.13 per cent to $1.55 billion following the relaxation of restrictions by the government. Silver imports jumped 29 per cent to $381 million.
The drop in exports has been attributed to a contraction in global demand and the softening of crude and commodity prices coupled with some domestic factors.
Rafeeque Ahmed, president of the Federation of Indian Export Organisations (Fieo), said, "The non-availability of interest subvention coupled with high cost of credit has dissuaded micro & small exporters to continue in exports. The uncertainty in the policy front has also been a demotivating factor as exporters are unable to do their costing and take a call on future exports."
Outbound shipments of cotton yarn and chemicals contracted 9.15 per cent and 10.52 per cent, respectively. Exports of pharmaceuticals witnessed a contraction of 0.16 per cent, while it was 3.73 per cent for gems and jewellery.
Tea, coffee, rice, tobacco and spices also recorded a negative growth.
"The further decline in the size of the merchandise trade deficit in January is along expected lines, given the correction in crude oil prices. Amidst the encouraging decline in the deficit in January, the contraction in non-oil merchandise exports is a cause for concern with the outlook for global demand remaining gloomy," Aditi Nayar, senior economist with rating agency Icra, said.
For the April-January period, exports grew 2.44 per cent to $265.03 billion. Imports were up 2.17 per cent to $383.41 billion, leaving a trade deficit of $118.37 billion.
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