*NEW DELHI: India’s trade deficit widened to its highest in more than fiveyears in June, the trade ministry said on Friday, driven largely by a surgein oil prices and a weaker rupee.*

Though merchandise exports rose 17.57 percent year-on-year in June, thetrade deficit widened to $16.6 billion from $14.62 billion in May. Oilimports rose 56.61 percent to $12.73 billion.

The oil import bill of India, the world’s third biggest crude importer,rose sharply with global oil prices amid concerns that U.S. sanctionsagainst Iran would remove a substantial volume of crude oil from the worldmarkets.

Washington, which had pulled out of the 2015 nuclear deal with Iran, ispushing countries to halt imports of Iranian oil from November.

India’s trade balance is further bruised by a weakening Indian rupee thathit an all-time low against the dollar last month.

The depreciating rupee and a widening trade deficit pose a challenge forPrime Minister Narendra Modi, who is aiming to boost economic growth aheadof national elections, due early next year.

Late last month, Subhash Chandra Garg, the economic affairs secretary inthe finance ministry, had said the trade deficit was expected to widen butthe outlook was unclear.

“We are not even certain what kind of a storm it is or even if it is astorm or whether it will turn out to be a storm,” Garg said.

“Oil has played a spoilsport in both imports and exports. It hasincrementally added $1.23 billion on imports and simultaneously a reductionin petroleum exports has been of $1.17 billion on month,” said ShubhadaRao, chief economist at Yes Bank Ltd in Mumbai.

Merchandise exports last month rose to $27.7 billion from a year ago, whileimports rose 21.31 percent year-on-year to $44.3 billion, the Ministry ofCommerce and Industry said in a statement.

India’s gold imports fell 2.8 percent year-on-year to $2.39 billion inJune, the statement said.