India's trade deficit widened to $20 billion in January from $17.7 billion in December as crude oil imports surged, according to data released by the Ministry of Commerce on Wednesday.
Exports rose marginally by 0.8 percent annually, for the first time since June 2012, to $25.59 billion in January, while imports for the month rose 6 percent to $45.58 billion, a senior trade ministry official said.
The cumulative values of total exports for the April-January period stood at $239.7 billion, down 4.9 percent from $251.9 billion in the corresponding period a year ago.
The value of imports for the period of April-January totaled $406.9 billion, a marginal increase of 0.01 percent compared with total imports of $406.8 billion in the year-ago period.
Continue Reading Below
Oil imports in January stood at $15.9 billion, up 6.91 percent compared with $14.9 billion in the corresponding period last year. Non-oil imports in January rose 5.71 percent to $29.7 billion, compared with $28.1 billion in the same period last year.
Oil imports for the April-January period stood at $140.4 billion, while non-oil imports for the same period totaled $266.4 billion.
Exports in India have been falling in the past year owing to the weak global demand, while imports -- lead by fuel and gold -- shot up most of the months in the fiscal year. Concerned with the widening current account deficit due to surging gold imports, the Indian government discouraged investments in gold by raising duties on the metal. The countries mounting energy import bill is another major worry for the government.
"The oil import bill is definitely a challenge, but for a growing economy, energy needs have to be met," Commerce and Industry Minister Anand Sharma said at an event in Mumbai, Reuters reported.
Although the minister expressed hope for the trade deficit to narrow in the Jan-March 2013 quarter, many analysts expect the current trade deficit to be around 4.5 percent to 5.0 percent of GDP in 2012/13, higher than the 4.2 percent trade deficit the previous year.
"The high current account deficit is unsustainable as it can't be funded for a long time with capital flows, and it will get adjusted through the exchange rate," A. Prasanna, an economist at ICICI Securities Primary Dealership, told Reuters. "The exchange rate will depreciate when the correction happens."
US-India Trade In 2012 Crosses $62 Billion
U.S.-India trade in merchandise goods for calender year 2012 stood at $62.85 billion, an increase of 9.66 percent over the corresponding period a year ago, according to a report issued by the Indo-American Chamber of Commerce.
The U.S. exports to India rose by 3.88 percent from $21.5 billion to $22.34 billion, while U.S. imports from India surged by 13 percent from $36.15 billion to $40.85 billion during the calendar year 2012, with a trade surplus of $18.18 billion in favor of India.