Since India imports more goods (in value terms) than it exports, it results in a huge imbalance in trade, or what is called a trade deficit.
In the financial year ending March 2012, the deficit zoomed to $185bn (£118bn) compared with the original estimate of $160bn.
India’s Commerce Secretary Rahul Khullar has predicted that the trade deficit may be slightly lower in 2012-13, due to falling global crude prices and recent government curbs on gold imports.
A $1 per barrel decrease in crude price reduces the country’s deficit by $900m at existing import volumes.
On the flip side, India’s export performance may prove to be a dampener this year.
Mr Khullar has added that India will be lucky if exports, which grew 21% in 2011-12, manage to witness a growth rate of 10-15% in 2012-13, due to the crisis in Europe and slow economic recovery in the US.
