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Trade deficit widens to $14.62 billion
News:
- India’s trade merchandise trade deficit widened
Important facts:
- Trade deficit widened to $14.62 billion in May 2018.
- The shortfall was $13.72 billion in April 2018 and $13.84 billion in May 2017.
- Reasons:
- 50% increase in global Brent price
- Exports in May grow faster on the back of engineering goods, petro products, chemicals and pharma.
Export related figures:
- Exports during 2018 were valued at $28.86 billion as compared to $ 24.1 billion in May 2017.
- Merchandise exports in April had grown by only 5.17% while imports grew 4.6%.
- Exports grew 8.32% in May 2017, while imports grew 33.1%.
- Cumulative value of exports for the period April-May 2018-19 was $54.77 billion .
Imports:
- Imports during May 2018 were valued at $43.48 billion which was 14.85% higher in dollar terms.
5.Major export groups that witnessed strong growth include:
- Engineering goods (14.8%)
- Petroleum products(104.5%
- Organic and inorganic chemicas(34.2%)
- Drugs and pharmacuticles (25.7%)
- Cotton yarn/fabrics/made-ups and handloom products(24.7%).
- Oil imports during May 2018 were valued at $11.5 billion which was 49.5% higher in dollar terms and 56.7% higher in rupee terms compared to $7.69 billion in May 2017.
6.Challenges:
- To sustain the growth momentum
- The U.S.-China trade war must be watched.
- Rising raw material costs will be a challenge
- Conclusion:
With the U.S. confirming 25% tariffs on $50 billion Chinese imports and the Chinese stating they would retaliate, it is time for India to keep engaged with both the U.S. and China to safeguard our own interest.