India's trade deficit widens

India's trade deficit is seen at $185 billion in the 2011/12 fiscal year on higher crude import bill, the trade minister said citing provisional data, which may worsen the country's current account balance and further weaken the rupee. Asia's third-largest economy imports nearly 80 percent of its crude oil needs, leaving it vulnerable to the vagaries of the oil market.
"The trade deficit is primarily because of the crude oil prices.... It is beyond us to control or regulate the crude prices in the foreign market," Anand Sharma said on Friday. Full-year exports have topped $300 billion, Sharma said, exceeding the target of around 20 percent export growth set by the government despite a slowdown in the major export destinations such as the United States and Europe.
However, imports have surged to $485 billion during April-March, a jump of 38.2 percent from the previous year. Apart from the crude bill, gold imports of nearly $59 billion have also helped widen the trade deficit. In 2010/11, Indian imports rose 21.6 percent from a year earlier to $350.7 billion, while exports grew 37.6 percent on year to touch nearly $246 billion.
With imports far outstripping exports, India's current account gap has steadily widened since last April. In the three months to end-December, current account deficit widened to 4.3 percent of the GDP from 4.1 percent in the previous quarter. New Delhi has projected the deficit for 2011/12 to be 3.6 percent of the GDP.