Giving some more respite to the Indian currency, India's trade deficit narrowed sharply for the month of August, as slowing gold demand limited imports; while the government's efforts to encourage exporters tap newer markets drove merchandise exports higher for the month. The country’s exports registered a double-digit growth of 12.97% for the second consecutive month in August 2013 to $26.14 billion, while imports declined during the month, narrowing the trade deficit to $10.9 billion from $14.17 billion a year earlier.
Country’s imports during the month declined 0.68% to $37.05 billion, with gold imports declining to just $0.65 billion compared with $2.20 billion in the previous month. The lower gold imports were mainly due to the steps taken by the government and the Reserve Bank of India to check demand in the world's largest consumer of the precious metal. The government has increased the import tax on gold, while the central bank has tightened rules to reduce speculative purchases by bullion dealers and taken other steps as well to curb demand.
The country’s wide trade gap is one of the biggest worries that has driven a sharp rise in India's Current-Account Deficit (CAD), thereby raising concerns that the country may find it difficult to finance the gap, if the US Federal Reserve begins scaling back its easy-money policies and FIIs consequently pulling their investments out. Meanwhile, the Commerce Minister has warned that with the international prices of crude oil rising over the past ten days, the import bill may go up in the coming months.
Country’s imports during the month declined 0.68% to $37.05 billion, with gold imports declining to just $0.65 billion compared with $2.20 billion in the previous month. The lower gold imports were mainly due to the steps taken by the government and the Reserve Bank of India to check demand in the world's largest consumer of the precious metal. The government has increased the import tax on gold, while the central bank has tightened rules to reduce speculative purchases by bullion dealers and taken other steps as well to curb demand.
The country’s wide trade gap is one of the biggest worries that has driven a sharp rise in India's Current-Account Deficit (CAD), thereby raising concerns that the country may find it difficult to finance the gap, if the US Federal Reserve begins scaling back its easy-money policies and FIIs consequently pulling their investments out. Meanwhile, the Commerce Minister has warned that with the international prices of crude oil rising over the past ten days, the import bill may go up in the coming months.
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