India's trade deficit shrunk to $9.21 billion in November, as import of gold and silver declined sharply, government data showed on Wednesday.
The import of gold and silver during the month under review fell by 80.55 % and stood at $1.05 billion from $5.4 billion imported in the corresponding period of 2012. After the two-and-half-year low of $6.7 billion in September, this was the second lowest level of trade deficit in the current fiscal.
The government had hiked to 10 % from eight % the import duty on gold for the third time this fiscal to control inflow of the precious metal.
The government had also banned shipments of gold coins and medallions. The apex bank -- Reserve Bank of India (RBI) had also restricted gold imports on consignment basis by banks.
According to data released by the commerce and industry ministry here, the value of merchandise exports in November grew by 5.86 % at $24.61 billion from the $23.25 billion worth of goods shipped-out in the corresponding period of 2012.
However, the export growth was the slowest in the last five months, as there was a reduction in petroleum and pharmaceutical exports from the country.
"Three product categories have pulled down our exports," said Commerce Secretary SR Rao.
"The cost of rough diamonds has gone up significantly as a result of which traders did not purchase diamonds during November. And as regards to petroleum products, I believe a couple of refineries were shut. Also, there has been reduction in pharmaceutical exports."
Imports in the month under review plunged by 16.37 % at $33.83 billion in the month under review to its lowest levels since March 2011 from $40.45 billion imported in the corresponding month of last year.
This has left trade deficit of $9.21 billion in November which is 46.43 % lower than the deficit of $17.20 billion reported in the corresponding month of last year.
In October, the country's trade gap widened to $10.55 billion after narrowing to a two-and-half-year low of $6.7 billion in September.
Pick-up in purchases of gold and silver during the festive season in that period was cited as the main reason for the widening of the trade deficit gap.
Oil imports during last month fell by 1.1 % to $12.96 billion in November from $13.10 billion imported during the corresponding period of 2012.
Non-oil imports slumped by 23.69 % to $20.86 billion compared to $27.34 billion imported during November 2012.
Cumulative trade deficit for April-November period of the current financial year was reported at $99.90 billion, sharply lower by 22.69 % from $129.23 billion registered in the corresponding period of last year.
Cumulative value of exports for the period April-November stood at $203.98 billion, 6.27 % higher than $191.95 billion registered in the corresponding period of last fiscal.
Imports have dropped by 5.39 % at $303.89 billion in the first eight months of the current fiscal from $321.19 billion reported in the corresponding period of 2012-13.