India’s September trade deficit dipped to $6.76 billion from $17.15 billion a year ago, the lowest in 30 months. While exports are up 11.15 percent to $27.68 billion in September, imports have dipped 18.1 percent to $34.44 billion.
According to the commerce ministry, September imports are the lowest since March 2011.
“Trade deficit in September lowest since March 2011, when it was $3.8 billion,” said commerce secretary S.R Rao.
The biggest factor that helped narrow the trade gap was the fall in gold imports.
September gold and silver imports came in at just $0.80 billion against $4.6 billion a year ago as both the government and the Reserve Bank of India have clamped down on gold imports as the rupee had slipped to record low levels.
India, also the world’s biggest buyer of gold, has raised the import duty on gold three times this year, taking it to 10 percent, and in July the government told importers that a fifth of their purchases would have to be turned around for export, leaving only 80 percent for domestic use.
The commerce ministry attributed the decline in gold imports to effective government measures to curb import of non-essential items.
Even C Ragarajan, chairman of the Prime Minister’s Economic Advisory Council attributed the decline in gold imports to actions taken by the government.
Gems and jewellery exports for September were down 8.31 percent at $3.79 billion, while oil imports were down 5.9 percent at $13.19 billion ( year-on-year).
India imported 393.68 tonnes of gold from April to September 25, slightly higher than the average 60 tonnes per month. But government restrictions have led to a sharp slowdown.