Oil imports push India's trade deficit

Mumbai, Mar 30 (UNI) With growth in imports on account of oil imports, outstripping the pace of export growth, merchandise trade deficit, on a balance of payments basis, sharply increased to US dollars 52.3 billion during the nine months (April-December) of the financial year 2006-07 from US dollars 40.1 billion during the same period last year.

According to date made available by a RBI release on the basis of Balance of Payments (BOP), imports during the period accounted for US dollars 143,636 million against exports earnings of US dollars 91,334 million. The imports were higher by US dollars 28,974 over imports of the order of US Dollars 114,662 registered during April-December in 2005-2006. Exports recorded an increase of 22.5 per cent during April-December 2006 but seven per cent less than the 29.5 per cent rise exports as witnesed in the corresponding period of the previous year.

Merchandise import payments, on BOP basis, showed 25.3 per cent growth in April-December 2006 as compared with 36.2 per cent in the corresponding period of previous year.

Quoting the data released by DGCI&S (upto November 2006), the RBI release said, deceleration in exports growth occurred on account of slowdown in exports of manufactured goods namely, chemical and related products, textile and textile products, leather and manufactures, and decline in exports of handicrafts and gems and jewellery.

Oil imports, as per DGCI&S data, increased by 39.2 per cent in April-December 2006 (46.9 per cent during the same period in 2005 ), while non-oil imports recorded a moderate growth of 18.6 per cent ( 34.3 per cent in April-December 2005), the release said.

The rise in crude oil imports reflected (i) elevated international oil prices despite some moderation in the third quarter of 200-07, and (ii) the strong volume growth. While the average crude oil price recorded a year-on-year increase of 19 per cent during April-December 2006, volume growth was about 16 per cent.

The average price of the Indian basket of international crude (a mix of Dubai and Brent varieties) rose to US Dollars 64.3 per barrel in April-December 2006 from US dollar 54 per barrel in the corresponding period of the previous year.

Invisible receipts rose by 29.9 per cent during April-December 2006 mainly due to significant growth in software exports, other professional and business services, travel and transportation, besides steady inflow of remittances from overseas Indians, the release said.

Private transfer receipts, comprising primarily remittances from Indians working overseas, remained steady at US dollars 19.6 billion during the period as compared with US dollars 17.2 billion in the same period last year.

Invisible payments also grew 18.9 per cent during April-December 2006 on account of surge in outbound tourist traffic, business services such as business and management consultancy, engineering, technical and dividend and profit payouts.

The miscellaneous receipts, net of software, were recorded at US dollar 21.6 billion during the period against US dollars 14.7 billion during the same period last year.

The current account deficit at US dollars 11.8 billion in April-December 2006 remained broadly at the same level of the corresoponding period of the previous year mainly on account of higher net invisibles receipts, the release said.

UNI