CAD rises in May on yellow fever
New Delhi: India’s exports contracted by 1.1 per cent in May to $24.5 billion after growing for four consecutive months. However, imports jumped by seven per cent to $44.65 billion in May.
This has pushed trade deficit to a seven month high of $20.1 billion in May as gold imports continue to surge. “As far as trade deficit is concerned, it is very worrisome.
It is largely contributed by heavy imports of gold and silver,” said commerce secretary S. R. Rao. Gold and silver imports in May grew by 89 per cent to $ 8.39 billion.
Rao said that decline in exports was also due to the steps taken by the government to restrict gold trading in special economic zones (SEZs). Gold exports from SEZs in May declined by $0.8 billion.
“Gold trading in SEZs is hitting India’s exports," he said. Rao said hopefully from June, exports will bounce back as gold trading activities have started in SEZs.
Exports during April-May period grew by 0.21 per cent to $ 48.67 billion and imports grew by 8.88 per cent to $ 86.6 billion. Federation of Indian Export Organisations (FIEO), president, M. Rafeeque Ahmed said that the exports figure for the month of May are indicative of the fact that the global recovery is still weak.
“The global growth has been uneven. We have seen few green shoots in countries like USA and Japan but Euro area continues to be a cause of concern,” said the FIEO president. He said that rupee depreciation has not pushed exports as demand is low.
“Other currencies are also depreciating, import intensity of exports are on increase and high inflation is pushing input cost,” added Ahmed.
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