Exports rise 10.29% in August; trade deficit swells to $11.64 bn

Gladys Abbott
September 16, 2017

On a sequential basis, the CAD also widened from $3.4 billion or 0.6% of the GDP in the fourth quarter of fiscal 2017.

The country's current account deficit increased sharply to 2.4 per cent of the gross domestic product (GDP) in the first quarter of FY18, from 0.1 per cent a year ago, primarily on account of a higher trade deficit, Reserve Bank of India (RBI) said on Friday.

Separately, data released by the commerce ministry showed higher oil prices boosted both merchandise exports as well as imports, which grew at 10.3% and 21.02%, respectively, in August.

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Cumulative exports during April-August of 2017-18 rose by 8.57 percent to USD 118.57 billion while imports increased by 26.63 percent to USD 181.71 billion, leaving a trade deficit of USD 63.14 billion. Commenting on the data, Federation of Indian Export Organisations (FIEO) President Ganesh Gupta said while the August figures are encouraging, "I am anxious about future growth as order booking position from October onwards is not good in view of increasing global uncertainties, rupee volatility and challenges at the domestic front". However, other key export items such as engineering goods (20%), chemicals (32.4%) and pharmaceuticals (4.21%) registered positive growth. Private transfer receipts, mainly representing remittances by Indians employed overseas, at $6.1 billion, increased by 5.3% over the corresponding quarter of previous year.

The trade deficit in the month widened to Dollars 11.64 billion from USD 7.7 billion during the same month a year ago.

The quarter also saw the net portfolio investment recording a substantial inflow of $12.5 billion in the debt segment compared with $2.1 billion in the first quarter of past year. "Support from FPIs (foreign portfolio investors) would be less strong as the flow to debt segment will slow down, given that the limits are being reached", he added.

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