Trade Deficit May Widen to $125 bn By March.

The country's trade deficit was expected to widen to $125 billion during this financial year though the export figures are bound to cross the target mark, said a top official from the Directorate General of Foreign Trade in Kolkata.

"The country is expected to surpass export target of $200 billion in 2010-11 and may even cross $210 billion. However, the trade deficit is likely to be between $115 billion to $125 billion as the import figures are also anticipated to cross $325 billion," said Anup Pujari, Director General of Foreign Trade.

The country's trade deficit was $117.3 billion in 2009-10, down from $118.7 billion in 2008-09. While during the first nine months of the current financial year, the trade deficit rose to $82.4 billion.

India's exports figures posted a robust growth in December 2010 zooming 36.4 per cent to $22.5 billion, which was the highest in 33 months. While imports contracted by 11.1 per cent to $25.1 billion, lowest in the last 14 months. This led to a narrow trade deficit of $2.6 billion, the lowest in three years.

"To cross the $200 billion-mark in exports, the growth rate should persist around 36 per cent in February and March," he added.

"Some sectors like gems and jewellery, engineering and chemicals are doing really well, while agricultural and cotton sector are feeling the pressure. Export of items like cotton will hugely depend on whether we will be able to meet the domestic demand," Pujari said.

In December, the export sectors that registered higher growth includes engineering (112 per cent), electronics (88 per cent), man-made fibres (30 per cent), yarns (65 per cent) and drugs (810 per cent).

Meanwhile, on the increasing concerns over the imports of low-cost Chinese equipments, he said, "This is a serious issue, but we should look at it in another way. If the Chinese government is giving big-ticket subsidies to exporters, it is good for the Indian consumers as long as quality is not compromised. However, we will not tolerate dumping of equipments into the country."

Source : sify.com