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Apr 19, 2:4 PM Country's exports grew by 21 per cent to 303.7 billion dollar in 2011-12 over the previous fiscal, while imports shot up by 32.1 per cent. Commerce Secretary Rahul Khullar said in New Delhi today, imports reached 488.6 billion dollar, leaving a trade deficit of 184.9 billion dollar.He said, this is the highest trade deficit and is a serious concern. Mr. Khullar also said, gold imports, which contributed in increasing the bill, is expected to decline in the current fiscal due to the duties imposed by the government. One, our import bill for 2011-12 has shot up to $475 billion. Of this, nearly a third, or $150 billion, comprises crude oil imports. Two, the trade deficit has bloated to $175 billion. Oil imports now comprise a gargantuan 85% of the country's total trade deficit.

India's crude oil production rose barely 1% in 2011-12 over the previous year to 7,63,000 barrels per day. Meanwhile, India's energy needs are exploding. The mismatch between domestic crude production and imports has had three disastrous consequences. One, our import bill for 2011-12 has shot up to $475 billion. Of this, nearly a third, or $150 billion, comprises crude oil imports. Two, the trade deficit has bloated to $175 billion. Oil imports now comprise a gargantuan 85% of the country's total trade deficit.

Three. India's balance of payments in 2011-12 has turned negative. for the first time since the Lehman crisis in September 2008. India's total crude oil requirement in 2013-14 is expected to rise to well over four million bbd. S Jaipal Reddy. Crude imports. Domestic crude production is slated to rise by 11% in 2012-13 and a further 8% in 2013-14 to reach just under one million barrels per day (bbd). Reddy has begun shaking up the old order. has been waiting for nearly two years to ramp up production in its Mangala oilfield. for example. reduce bureaucratic delays. First. India's domestic oil production slowed on the watch of Murli Deora who held the portfolio between 2006 and 2011. should fall from the current level of 80% of total consumption to 75% if new oilfields prospected by Cairn and ONGC deliver on their promise by 2014. the highest since 1993 when FIIs were allowed to invest in the Indian stock market. This requires three policy changes. The long-term target must be to bring the ratio of imported crude to total consumption down to the historical level. The minister for petroleum and natural gas. Second.50 billion-plus in the JanuaryMarch 2012 quarter. encourage more joint ventures in exploring foreign oil and gasfields. This is despite robust FII inflows: a record $9. of around 65%. last seen in the 1980s and early-1990s. who took charge in January 2011. however. ONGC Videsh's Russian . has a lot of policy debris of the past to clear up. Cairn.

KG onshore. East Timor and Australia should encourage Reliance Industries (RIL).investments in Sakhalin-I and Videocon's fields in Mozambique. pursue the new shale gas strategy that the Prime Minister outlined last month. Despite environmental concerns over deep-rock fracking and the cost of technology. This could provide an additional 10 . Assam-Arakan. Essar. The government is locked in a dispute with RIL over a host of issues relating to gas pricing and approval of new investment in infrastructure to drill more wells in the contiguity of KG-D6. It is currentlyproducing less than 28 mmscmd. shale gas is already boosting America's domestic energy production and reducing its historical reliance on oil imports.53 billion. Natural gas production from the KG-D6 fieldwas estimated to yield 80 million standard cu m per day (mmscmd). By end-2013. Cauvery onshore and Indo-Gangetic basins) could reveal long-term potential. a decade later. causing a huge crisis for sponge iron plants across the country. RIL last month finally secured government approval to explore four satellite fields in KG-D6 at an investment of $1. remains unfulfilled. Third. Brazil. Gondawana. Adani and other private sector exploration companies to expand their global footprint. Also hit are power projects whose gas-fired plants are working at less than 50% capacity. RIL's discoveries in the Krishna Godavari (KG) basin at the turn of the century promised much but that promise. shale gas exploration bids in six Indian regions (Cambay.

The issue though is bigger than one or two private companies. which last year invested $7. Assuming domestic crude production doubles in the eight years between 2013-14 and 2021-22 to two million bbd at a CAGR of 9%. will things really change? The minister must set ambitious targets. India will still need to import four million bbd. Indian crude oil demand. has best-in-class expertise in new deep-sea drilling technology. despite the growth of renewable and alternative energy sources. a reasonable estimate based on both economic and geopolitical factors.4 trillion cu ft . India's oil and gas exploration policy has been caught in red tape for over a decade.2 billion to acquire a 30% stake from RIL in 21 oil and gas blocks.mmscmd of natural gas. British Petroleum ( BP).a realistic target that will constitute a significant advance in combating our long-term trade and current account deficits.a mere tenth of RIL's own estimates. However. It is significant.7 million bbd to around six million bbd in 2021-22. With Reddy at the helm of the petroleum and natural gas ministry. This will play an increasingly-important role in KG-D6's future development. If the price of crude roughly doubles in a decade to around $230 per barrel. will rise at least 60% from the current 3. however. the dependence on foreign crude would fall from 80% currently to around 67% . the annual cost of India's targeted crude oil imports of four million bbd would rise from $150 billion today to $335 billion in 2021- . that BP's statutory filings in London indicate that proven reserves in the KG-D6 field are 1.

Minhaz Merchant Chairman. Merchant Media . our exports should be $800 billion by 2021-22. bringing the oil import-to-total exports ratio ($335 billion/$800 billion) down from today's inflationary level of over 50% to a more sustainable 41%. Taking the lower growth figure in that range (12%). The positive spin-offs on the rest of India's economy will be significant. Indian exports.22. are expected to grow at a CAGR of 12-15% a year. currently $300 billion.

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