Contrary to some conservative projections,industry body Assocham today said it expects India’s trade deficit to increase sharply by over 40 per cent to USD 262 billion in the current fiscal in the face of exports facing headwinds in the western markets.
If the trade scenario unfolds,as per the Assocham projections,the rupee would come under further pressure. The Indian currency has already lost over 20 per cent against the US dollar in the last one year.
“Out of different possible scenarios…,the most likely would be one where imports grow by 25 per cent and exports increase by about 15 per cent. This would leave the country with a balance of trade (BoT) of USD 262 billion,” Assocham President Rajkumar Dhoot said.
In such a scenario,exports would grow up to USD 348 billion but imports would sharply increase to USD 610 billion.
The chamber came out with these numbers,days ahead of Commerce and Industry Minister Anand Sharma taking a meeting of all the export promotion councils to assess the export prospects in a difficult global market.
The Commerce Ministry would then fix the export target for the fiscal 2012-13. It is also expected to provide some sops to the exporters in the forthcoming annual review of the country’s Foreign Trade Policy.
In 2011-12 fiscal,India’s merchandise imports totalled USD 488 billion against exports of USD 303 billion,leaving a trade gap of USD 185 billion.
High crude oil prices and rising gold and silver imports contributed to 32 per cent import growth in the last fiscal.
Import on these two counts itself was a whopping USD 217 billion,accounting for over 44 per cent of the countrys total import bill.
Against the backdrop of weak recovery in the US economy and continuing troubles in the European markets,the crude oil imports would continue to remain the biggest import item this fiscal,Dhoot,who is also (Rajya Sabha) Member of Parliament,said.
Besides,he said that country’s social habit in terms of gold being one of the biggest purchases during the marriages is not going to change overnight,even though the middle class families find it hard to manage.
While gold imports dropped 33 per cent year-on-year in April this fiscal to USD 3.1 billion,the period saw strike by jewellers against excise levy on unbranded jewellery. They kept imports on hold. Bullion imports pick up after Monsoon.
With weak outlook for merchandise exports,the country would look up to the services exports for retrieving the balance of payment (BoP) situation,the chamber said.