Higher trade deficit due to spurt in global prices:Govt

Trade deficit of USD 117 billion, highest in the last three fiscal years

PTI | December 21, 2011



The government on wednesday attributed the increasing trade deficit, which touched USD 117 billion in the first eight months of 2011-12, to increasing prices of imported commodities, like crude oil.

"The prices of petroleum, fertilisers, gold, edible oil, gems and jewellery have increased. Their demand has also increased. These lead to a higher value of imports," Commerce and Industry Minister Anand Sharma said in the Rajya Sabha.indian economy

Increasing trade deficit - difference between imports and exports - is one of the main concerns among investors about the Indian economy.

Trade deficit of USD 117 billion during April-November 2011 is the highest compared to the corresponding periods in the last three fiscal years. The deficit was USD 119 billion in the entire 2010-11 and USD 109 billion a year before.

Replying to supplementaries during Question Hour, Sharma said historically there has been trade deficit as India is dependent on imports for important commodities like crude oil, edible oils and fertilisers.

The trade deficit is not because of "want of efforts" but due to global economic situation, he said.

Due to recent developments in some petroleum producing countries "oil prices have gone up significantly....impacting our imports," he said.

India imports about 80 per cent of its crude oil requirements.

Sharma said the "deficit will be there" as the country has not yet reached a stage to become self-sufficient in crude oil and fertilisers.

In the recent times, commodity prices have increased significantly amid the global economic scenario, including the ongoing euro zone crisis.

Sharma said efforts were on to double the country's exports by 2014 and its share in global trade in percentage terms by 2020.

He also said efforts were on to increase domestic production of crude oil, edible oils and pulses.

Exports in the first eight months totalled USD 193 billion, while imports were valued at USD 310 billion.

In 2010-11 fiscal, India's exports for the first time crossed USD 200 billion mark.
 

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