New Delhi, Oct 15 : Associated Chambers of Commerce and Industry of India (Assocham) said on Monday that merchandise trade deficit has recorded USD 13.98 Billion in September, which is the lowest in past five months, and was a positive outcome of the government efforts to curtail down the negative impact of currency depreciation.
'Merchandise Exports grew at a marginal negative growth of 2.15 percent in September 2018 in USD terms but there was a positive growth of 9.65 per cent in Rupee terms during the same time,' the chamber said.
Imports grew at a positive growth rate of 10.45 per cent in USD terms (which is the lowest in last 5 months) and 23.78 percent in Rupee terms. These are welcome developments, it said..
'The merchandise trade balance is driven by massive increase in the oil imports bill, followed by imports of electronics, gems and jewellery (including gold). There are some imports which are not meant for the domestic market. Some amount of imported crude oil after processing and gold (and precious stones) is used eventually for exports.
'In the case of electronics imports, a percentage of intermediate goods are used as components in domestically manufactured final products. Therefore, Assocham welcomes the government action on tariff rates hike for several products, including some electronic items.'
'Assocham believes that increase in oil prices is likely to persist because some of the world’s major oil suppliers are facing sanctions from the US. Venezuela and Iran are major suppliers of oil in the world. Oil exports from Iran will come under US sanctions from November 4, 2018 and oil supply from Venezuela is also dwindling at a rapid rate.
'Iran is one of the largest suppliers of oil in the world and it is the third largest source of oil import for India. If oil supply from Iran comes to a stop, then there is likely to be even more pressure on international oil prices. Such an eventuality is going to further exacerbate an already difficult situation of ever increasing oil prices. Government ought to initiate corrective measures to address this impending crisis without any further loss of time,' the statement added. (UNI)