Trade deficit narrows on 77 percent drop in gold imports

New Delhi: Tue Feb 11, 2014: India's trade deficit narrowed in January, helped by a 77 percent drop in imports of gold and silver while exports ticked up, improving the outlook for the country's fragile current account balance.

The trade ministry said it had recommended easing curbs on gold imports, prompted by the brighter trade picture.

The trade deficit stood at $9.92 billion last month compared with $10.14 billion in December, a trade ministry official said on Tuesday.

Merchandise exports rose 3.79 percent year-on-year to $26.75 billion, compared with a 3.5 percent annual growth in December.

Imports fell 18.07 percent year-on-year to $36.57 billion led by a 77 percent drop in gold and silver imports on the year.

India expects to keep the current account deficit down under $50 billion in the fiscal year to March 2014. The shortfall was a record $87.8 billion in the previous 12-month period which had precipitated a record fall in the value of the rupee against the dollar last summer.

(Reporting by Rajesh Kumar Singh and Manoj Kumar; Editing by Sanjeev Miglani)

Courtesy: Reuters