, Indian exports crossed the psychological threshold of USD 100 billion and while trade deficit remains at USD 39 billion most of that is because of oil imports resulting in a non-oil net trade surplus. Exports grew at higher than expected 25% while imports grew lower than expected 32%.
Rising oil prices took a major toll on the exchequer as oil imports jumped year-on-year from USD 29 billion to USD 43 billion. India imports 73% of its crude oil and natural gas and this makes up 30% of the total imports.
Minister of Trade and Commerce Kamal Nath said that exports would grow to USD 165 billion by 2009-10 without taking into consideration export-import services that could account USD 100 billion in 2005-06 terms. Services make up 52% of the Indian Gross Domestic Product (GDP) and that explains why India drives that message at World Trade Organization (WTO) meetings.
Bilateral Indian exports increased across the board with UK registering 30% increase, Singapore 54%, South Africa 44%, and China at 35%. India is encouraging exports to ?ocus markets? such as Africa, Latin America, and Commonwealth of Independent States (CIS) through an extra import entitlement scheme of 2.5% of exports of ?ocus products? such as fish, handloom, handicrafts, leather, and stationery. There is also a plan in place to exempt exporters from service tax and the much-hated fringe benefit tax.