Aside crude, sharp rise in non-oil imports too contributing to trade imbalance: ASSOCHAM
It is not only crude oil which is exerting pressure on India's import bill and consequently on the current account deficit and the rupee, but a host of other non-oil items like coal, electronics, chemicals and leather and leather products, fruits and vegetables are witnessing rising imports and becoming a drag on the Country's overall balance of trade situation , an ASSOCHAM analysis has noted.
"While there is no alternative to crude oil and gold imports, domestic supply constraints have led to an increase in imports by well over the double digit in as many as 22 (other than crude and gold) out of 30 top import items," the chamber noted from the latest July data.
"It is given that crude oil and gold and to an extent essential chemicals, and select electronic items do not have any domestic alternative and therefore, their imports are unavoidable. But close to 60 per cent rise in imports of fruits and vegetables from USD 98.67 million in July 2017 to USD 157.47 million in July, 2018 can surely be reduced, if not eliminated by improving domestic productivity and quality. Same is true about coal, coke and briquettes which have witnessed a runaway upward movement in imports for the month under review, from USD 1.54 billion to USD 2.05 billion. Likewise, imports of leather and leather products saw a rise of over 22 per cent from USD 79.66 million to USD 97.54 million, while electrical and non-electrical machinery witnessed a 30.59 per jump in imports from USD 2.4 billion to USD 3.15 billion.
"This also shows that there is a good amount of demand for all these products which is leading to a sharp rise in imports as domestic supply constraints have surfaced," the ASSOCHAM analysis pointed out.