New Delhi, India (4E) – India’s trade deficit fell to its lowest level in 30 months in September as weaker demand for oil and gold eased imports while exports picked up.
September trade deficit fell to $6.76bn compared with $10.9bn in the previous month. While exports rose 6 percent to $27.68bn from $26.1bn in August, imports fell 7.1 percent to $34.44bn from $37.05bn.
Trade Secretary S.R. Rao said that the government has taken measures to reduce importation of nonessential items such as precious metals, resulting to a huge decline in imports.
Wednesday’s data shows gold imports in September dropped 82 percent from a year ago to $800mn while imports of crude oil was lower by 5.94 percent to $13.20bn.
Reserve Bank of India Governor Raghuram Rajan has said the government’s goal of lowering the current account deficit (CAD) to $70bn or 3.7 percent of the gross domestic product in 2013-2014 is attainable.
The country’s trade gap has been the major driver of its rising CAD, which climbed to $87.8bn in the fiscal year ended March 31. That resulted to a significant decline in the value of the local currency, the rupee, and increased concerns about India’s ability to finance a huge account gap once the U.S. Federal Reserve starts to scale back its easy-money measures.