India's January trade deficit widens, slow exports growth a concern

Saturday,   16-Feb-2019   10:45 AM (IST)

India’s trade deficit widened in January pushed by a rise in gold imports, while exports growth remained low, deepening concerns for Prime Minister Narendra Modi who wants to accelerate economic expansion ahead of elections. Modi, who has set a target of doubling India’s share of world exports and reducing its dependence on imports to create jobs, faces criticism from businesses for not doing enough in the last five years. India’s goods exports have shown little growth since Modi took charge in 2014, as small exporters - contributing nearly 35 percent to total exports - have been hit hard by rising input costs after the chaotic launch of national sales tax in 2017. In January, merchandise exports rose 3.74 percent from a year earlier to $26.36 billion, while imports were up 0.01 percent to $41.09 billion, data released by the commerce ministry on Friday showed. The gold imports in January rose 38.16 percent year-on-year to $2.31 billion, widening the trade deficit to $14.73 billion compared to $13.08 billion in the previous month. Indian exports of textiles, agricultural products and engineering items have been hit hard due to a shortage of bank credit and delay in refund of input credit under the goods and services tax, exporters said. India’s total April-January exports, including goods and services, are estimated to touch $440 billion, up 9.07 percent from a year ago, while imports were estimated at $530.55 billion, up 10.74 percent, the government statement said. India’s goods exports, which had touched $314.4 billion in 2013/14, have been slowly recovering after falling to $262.3 billion in 2015/16.