Trade Deficit widens to $15.33 billion in April
April gold imports is at $3.97 billion vs $3.27 billion in March, whereas oil imports stood at $11.38 billion vs $11.75 billion in March.
Trade deficit widened to a fivemonth high in April 2019 to $15.33 billion, as against $13.72 billion a year ago, on the back of higher oil imports at $11.38 billion, a jump of 9.26%, and a 53.99% jump in gold imports to $3.9 billion.
Only 14 out of 30 major export product groups were in positive territory during April 2019, including petroleum, organic and inorganic chemicals, drugs and pharma, readymade garments of all textiles, electronic goods and ceramic products.
“The export growth of 0.64% is not at all encouraging as almost all the labour-intensive sectors, including leather and leather products, gems and jewellery, and engineering goods, dominated by micro, small and medium enterprises fell into negative territory,” Federation of Indian Export Organisations (FIEO) president Ganesh Kumar Gupta said. According to him, these sectors are still facing liquidity problem, besides various other challenges, including global trade war, protectionism, fragile global conditions and constraints on the domestic front.
FIEO is of the view that the global trade scenario may worsen further on the back of rising trade tensions between the US and China, putting more pressure on Indian exports in the months to come. “The uncertainty attached to it will affect the flow of investment and add to currency volatility,” Gupta said.
Services export growth in April is estimated at $17.98 billion, a rise of 2.39%, while services import was up 4.73% at $11.43 billion, resulting in $6.55 billion in net of services, data released by the commerce ministry showed.
Overall exports, including merchandise and services, went up 1.34% to $44.06 billion, while imports grew 4.53% to $52.83 billion, resulting in an overall trade deficit of $8.78 billion.
“A sharp drop of over 7% in highly employment-oriented engineering exports in April is a matter for concern for Indian exporters, who are facing global headwinds like escalated trade war, geopolitical uncertainties in the Middle East and rising cost of finance and raw material at home,” Ravi Sehgal, chairman of the Engineering Export Promotion Council, said, adding that the nearstagnant export makes it imperative for the RBI to cut the interest rates in its June credit policy review while measures like availability of raw material at reasonable prices should be ensured by the government.