Prabhu to chair inter-ministerial meet on rupee, trade deficit tomorrow

New Delhi: Commerce and Industry Minister Suresh Prabhu will chair an inter-ministerial meeting Thursday to discuss the depreciating rupee and widening trade deficit, an official said. The meeting will deliberate upon ways to address India’s trade deficit in goods and pressure on the rupee, the official added.

Representatives from the department of economic affairs, coal ministry, steel ministry, oil ministry and department of pharmaceuticals are expected to attend the meeting. The meeting assumes significance as the rupee has hit an all-time high of 73.74 against the US dollar, which would raise India’s import bill and widen the trade deficit (difference between imports and exports).

The trade deficit was at a five-year high of USD 18.02 billion in July. It came down to USD 17.4 billion in August. During the April-August period this fiscal, the country’s exports recorded a growth of 16.13 per cent, while imports grew by 17.34 per cent. The depreciating rupee puts pressure on the country’s oil import bill.

The domestic currency has depreciated nearly 13 per cent since the beginning of this year. Besides having impact on current account deficit, the sliding rupee has made imports costlier and led to oil prices skyrocketing to record highs. India is the third largest importer of crude oil. 

Oil imports during the first five months of the current fiscal rose by 53.55 per cent to USD 58.81 billion. Since 2011-12, India’s exports have been hovering at around USD 300 billion. During 2017-18, the shipments grew by about 10 per cent to USD 303 billion. Promoting exports helps a country to create jobs, boost manufacturing and earn more foreign exchange.