RBI's Reddy says trade gap manageable

Reserve Bank of India governor YV Reddy said on Thursday 23 June that the widening trade deficit is sustainable because it is underpinned by buoyant export of services and remittances from overseas migrant workers.

RBI governor Yaga Venugopal Reddy said the country's foreign exchange reserves were comfortable and acted as a cushion to absorb shocks.

"An intrinsic link between merchandise imports and exports has emerged and become entrenched so that the large expansion in imports is also spurri