NEW DELHI: The weak Indian currency will put further pressure on India's trade deficit, as the more expensive import bill for crude oil is likely to increase by $ 26 billion in financial 2018-19 year, which ultimately led to an increase in sales prices. "It's not a very favorable environment, on the one hand, oil imports are rising, and a weaker rupee and higher crude oil prices are contributing to the problems, even with a cautious estimate the oil import bill will be $ 114 billion", said an official from the Ministry of Finance.
This is $ 26 billion more than the oil import bill for the financial year 2017-18, which stood at $ 87.7 billion (€ 5.65 lakh crore). Currently, India's dependency on oil imports is more than 80 percent of its needs, and in the last fiscal years it has imported 220.43 million tons (MT) of crude oil. "For FY 2018-19, imports are tied to almost 227 MT, the official estimate is that crude oil imports will be tied to about $ 108 billion ($ 7.02 trillion) at an average crude oil price of $ 65 a barrel. and an exchange rate of $ 65 per dollar, but it will be surpassed in the current scenario, "the official added.
The rupee on Thursday again reached a low of 70.32 against the US dollar in the opening deal.
India's trade deficit has already risen to $ 18 billion and this will put pressure on the current account deficit, which could be a spoiler for the government. The official added that even if the depreciation of the rupee would result in higher revenues for domestic oil producers and exporters, this would result in an increase in petrol and diesel prices.
"There could be an increase in the retail price of petrol, diesel and cooking gas (LPG), which will be seen around the end of this month, if oil prices continue to rise at these levels and the rupee is $ 70 per dollar. , retail prices could rise by 50-60 paisa per liter, "the official added. Prices of petrol and diesel were refused on Thursday with 6 liters per liter, respectively & # 39; 77.20 and `68.78 in Delhi.
Exporters say the depreciating rupee may be beneficial in the short term for certain segments, but global buyers may ask for discounts if they keep the unit near the 70-mark. The overall impact of the rupee slide will be good, but may differ per segment. Although it can be positive for shipments from the marine, agro, carpet, handicraft, leather goods, clothing and textiles sectors, segments such as gems and jewelery, electronics and petroleum can earn less.
Double whammy for steel sector
New Delhi: the domestic steel sector will feel the heat of Rupee drop, because the import of raw materials can become more expensive. The cost of debt servicing can also shoot up, analysts say. A weak rupee supports exports but protects domestic industry, including steel, against imports as they become more expensive, according to JPC economist AS Firoz.
Indian travelers unfazed
New Delhi: the falling rupee has had no adverse impact on the outbound travel plans of Indians, Thomas Cook India and Cox & Kings said on Thursday. "Indian travelers are very calculating, they take into account currency fluctuations and keep a significant buffer while budgeting their travel," says Cox & Kings relations with Karan Anand.