Sept trade deficit $18.1 bln, widest in 11 months

Last Updated: Thu, Oct 11, 2012 10:59 hrs

India's annual exports fell for the fifth consecutive month and imports rose in September, pushing the trade deficit to its widest in 11 months in the latest bleak data from Asia's third largest economy as it struggles to balance its finances.

Exports contracted to $23.7 billion, 11 percent lower than last year, the government said in a statement, without giving details of which sectors were worst hit. Imports rose for the first time since April, driven by an almost 31 percent jump in crude oil purchases for the energy-hungry economy.

September's $18.1 billion trade deficit was the biggest since October 2011, a worrying development for the government while it seeks to stave off the threat of a downgrade to India's sovereign debt rating.

Massive asset purchase programmes unveiled by the central banks in the United States, Europe and Japan are expected to stoke higher global commodity prices, which would inflate India's import bills.

Heeding warnings by Standard & Poor's and Fitch that the fiscal and current account deficits could trigger a credit downgrade, the government has recently taken unpopular steps such as hiking diesel prices and allowing foreign supermarkets in the retail sector.

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