Russia-Ukraine conflict: In February, the gap between India’s commercial exports and imports increased, which reached a five-month low in January. The main reason for the increase in February was the rise in the prices of imported products due to a jump in crude and commodity prices amid rising geopolitical tensions. According to official data, the slowdown in domestic demand after the Omicron wave also widened the trade deficit.
Trade deficit at $ 20.88 billion
According to data released by the Ministry of Commerce and Industry on Monday, India’s commercial exports grew by 25.10 per cent to USD 34.57 billion in February, while imports grew by 36.07 per cent to USD 55.45 billion. This took the trade deficit to $ 20.88 billion, from the level of $ 17.42 billion in January.
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Due to these reasons the trade deficit increased
The trade deficit in February was 59 per cent higher as compared to the same month last year.
During April-February, exports touched a level of $374.81 billion. Growth in exports in February was mainly driven by growth in petroleum, engineering goods, gems and jewelery and chemicals.
$400 billion export target to be achieved in FY22
Data released on Monday shows that India’s exports may exceed $400 billion earmarked for the fiscal year 2021-22. Economists, however, cautioned that the trade deficit could widen due to rising uncertainty due to the Russia-Ukraine conflict and further high current account deficit due to higher oil prices in the international market. could. On the other hand, exports may suffer due to supply related problems and increase in freight charges.
Economists estimate that India’s current account deficit may widen to more than 2 per cent of GDP in FY22, from 0.9 per cent in FY21. Whereas in FY23, it could be 2.8 per cent of GDP.
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