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India's CAD widens to USD 14.3 billion as trade deficit is up

The widening of the CAD on a year-on-year basis was primarily on account of a higher trade deficit, which was at $41.2 billion brought about by a larger increase in merchandise imports relative to exports.

Mail Today Bureau | September 16, 2017 | Updated 10:30 IST
India's CAD widens to USD 14.3 billion as trade deficit is up

The country's current account deficit in the April-June quarter of 2017-18 rose sharply to $14.3 billion (Rs 92,950 crore), or 2.4 per cent of gross domestic product (GDP), primarily on account of a larger increase in merchandise imports compared to exports. The figure stood at $0.4 billion (Rs 2,600 crore), or 0.1 per cent of the GDP, during the corresponding period of 2016-17, the Reserve Bank said.

The widening of the CAD on a year-on-year basis was primarily on account of a higher trade deficit, which was at $41.2 billion (over Rs 2.6 lakh crore) brought about by a larger increase in merchandise imports relative to exports, RBI said. On a sequential basis, the current account deficit also widened from $3.4 billion or 0.6 per cent of GDP in the fourth quarter of fiscal 2017.

Balance of payments for the April-June quarter stood at $11.40 billion up from $6.969 billion in the year ago period. The net foreign direct investment at $7.2 billion in the reporting quarter almost doubled from its level in the same period last year.

According to commerce ministry data released on Friday, the exports grew by 10.29 per cent, highest in the last four months, to $23.81 billion (over Rs 1.5 lakh crore) in August, helped mainly by higher growth in petroleum products, engineering and chemicals shipments, government data showed on today.

Imports, too, rose by 21.02 per cent to $35.46 billion (over Rs 2.3 lakh crore) in August from $29.3 billion in the yearago month, according to the commerce ministry data. Trade deficit widened to $11.64 billion (Rs 75,660 crore) in the month under review from $7.70 billion (Rs 50,050 crore) in August 2016 due to increase in gold imports.

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