New Delhi: The demand of petroleum products, gold and silver in the country is causing imbalances in foreign trade. These commodities are supposed to be the main culprit behind the foreign trade deficit reaching dangerous level of USD 185 billion. Apart from these commodities, significant increase in the imports of fetilisers, coal and edible oil is the cause for worry for the government. Current foreign trade deficit figure is at all time high.  

In last financial year, exports worth USD 303.7 billion have been done from India which is 21 percent higher than the previous year. But imports have also seen significant jump. Imports grew by 32.1 percent to USD 488.6 billion. Petroleum products had the biggest contribution of USD 155.6 billion in the total imports last year. Whereas, gold and silver remained favourites among investors and its import had also seen a growth of 44.4 percent to USD 61.5 billion. 

While sharing information on foreign trade, Commerce Secretary Rahul Khullar said that not only rising imports of petroleum products, gold and silver is also cause for worry but the rise in imports of fertilizers, coal and edible oil also needs to be addressed. Coal import grew by 80 percent whereas import of fertilizers has also seen a growth of 59 percent. Edible oil imports grew by 48 percent.

Government is considering that if the imports continue to grow in the same manner, it can sabotage the expected benefit from the export growth measures. Khullar says that to get benefit from export growth it is need of the hour to take steps in finding ways to increase domestic supply of these commodities. However, the 4 percent import duty on gold in the current year is expected to affect the gold import from abroad.   

Foreign trade deficit in FY 2010-11 was at USD 118.7 billion. But with it growing to USD 185 billion in last FY, the current account deficit in 2011-12 has come closer to 4 percent mark. However, the Finance Minister has projected it to be at 3.6 percent in current FY 2012-13. The government is considering the current year to be tough in terms of exports. Exports are already seeing downtrend since March 2012. In comparison to the USD 34.3 billion exports this month last year, USD 28.7 billion exports has been registered in this month.

(JPN/Bureau)