Trade deficit in India, Oil prices continue to weigh on the Rupee

The fast growing economy in India is running a trade deficit due to oil import prices. The sensex and Indian rupee are feeling the pain of high oil prices. As the new middle class in India works hard to earn Rupees and buy their first car, oil prices are hitting home.
India's trade deficit increased year-on-year in June, a report by the Department of Commerce and Industry said Friday. This was mainly due to a surge in import of oil.

The trade deficit increased to Rs 41915 crores from Rs 30800 crores in the same month last year. In US dollars, trade deficit was estimated at $9.8 billion, up from $7.5 billion in the previous year.

Exports rose 29.7% to Rs 62970 crores from Rs 48400 crores. In dollar terms, exports grew 23.5% to $14.7 billion from $11.9 billion.

Imports rose 32.2% to Rs.104705 crores from Rs.79200 crores in the previous period. In dollars, imports grew 25.9% to $24.5 billion from $19.4 billion.

Oil imports grew 53.4% to $9033 million from $5890 million in the corresponding period last year. Non-oil imports grew 13.9% to $15420 million from $13534 million.

During the second quarter, the trade deficit was valued at
Rs 126785 crores or $30.4 billion. Exports rose 23.6% in rupee terms and 22.3% in dollar terms. Imports increased 31.1% in rupee terms and 29.7% in dollar terms.

This all happening while Indian exports surge to new highs and the rupee continues its long term strength vs the US Dollar.
India’s exports during June, 2008 were valued at US $ 14664 million which was 23.5 percent higher than the level of US $ 11870 million during June, 2007. In rupee terms, exports touched Rs.62790 crore, which was 29.7 per cent higher than the value of exports during June, 2007.

According to Ministry of Commerce & Industry’s statement, cumulative value of exports for the period April- June, 2008 was US $ 42846 million (Rs.178480 crore) as against US $ 35033 million (Rs.144358 crore) registering a growth of 22.3 per cent in Dollar terms and 23.6 per cent in Rupee terms over the same period last year.

India’s imports during June, 2008 were valued at US $ 24452 million registering a growth of 25.9 per cent over the level of imports valued at US $ 19424 million in June, 2007. In Rupee terms, imports increased by 32.2 per cent.

Cumulative value of imports for the period April- June, 2008 was US $ 73275 million (Rs.305265 crore) as against US $ 56506 million (Rs.232855 crore) registering a growth of 29.7 per cent in Dollar terms and 31.1 per cent in Rupee terms over the same period last year.

Oil imports during June, 2008 were valued at US $ 9033 million which was 53.4 per cent higher than oil imports valued at US $ 5890 million in the corresponding period last year. Oil imports during April- June, 2008 were valued at US $ 25526 million which was 50.2 per cent higher than the oil imports of US$ 16996 million in the corresponding period last year.

Non-oil imports during June, 2008 were estimated at US $ 15420 million which was 13.9 per cent higher than non-oil imports of US $ 13534 million in June, 2007. Non-oil imports during April- June, 2008 were valued at US $ 47748 million which was 20.9 per cent higher than the level of such imports valued at US $ 39510 million in April- June, 2007.

The trade deficit for April- June, 2008 was estimated at US $ 30429 million which was higher than the deficit at US $ 21473 million during April- June, 2007.
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