Asia's top diesel exporter cuts tariffs as trade gap swells
INDIA, one of the biggest exporters of diesel in Asia, halved levies to boost shipments after the trade gap swelled to a record last month.
The government on Tuesday (Aug 2) cut export taxes on diesel to 5 rupees (S$0.09) a litre from 11 rupees, apart from slashing levies on jet fuel to zero. This is the second decrease since the tariffs were imposed on Jul 1.
The measures come hours after data showed India's trade deficit ballooned to a record high in July, as elevated commodity prices and a weak rupee inflated the country's import bill.
The gap between exports and imports widened to US$31.02 billion in July, from US$26.18 billion in June, BVR Subrahmanyam, India's trade secretary, told reporters at a briefing in New Delhi Tuesday, citing preliminary data. The trade deficit in June was a record before the latest numbers were released.
The government also slightly raised the tax on domestically produced crude oil to 17,750 rupees per tonne from 17,000 rupees per tonne. Last month, India slashed windfall taxes, sparking a rally in the nation's No 1 fuel exporter Reliance Industries.
Imports jumped 43.59 per cent in July from a year ago, while exports dropped 0.76 per cent. Inbound shipments of petroleum products during the month stood at US$21.13 billion, and gold imports came in at US$2.37 billion. Coal imports stood at US$5.17 billion while petroleum exports for last month stood at US$5.4 billion, government data showed.
July's data comes after the federal government raised import duty on gold last month to discourage buyers in the world's second-largest consumer and rein in the yawning trade deficit.
Growing concerns about the gap and an exodus of foreign capital from Indian markets had pushed the rupee to a record low of 80.06 per dollar last month. The local unit has since rebounded amid a broad pick up in appetite for riskier assets and currencies. BLOOMBERG
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