Exports post double-digit growth in May

New Delhi: Exports posted double-digit growth in May, the highest in six months, as shipments of key commodities, such as engineering goods, petroleum products, readymade garments and pharmaceuticals registered strong increases.
Imports continued to fall during the month, mostly due to declining gold imports, which narrowed the trade deficit sharply compared to the previous year.
Recording growth for two consecutive months of the new fiscal year after a lacklustre performance last year, exports increased 12.4 per cent in May to $28 billion over the same month a year ago.
India had missed its export target of $325 billion last fiscal year, as outbound shipments grew just 3.98 per cent to $312.35 billion because of tepid international demand.
Trade body hopeful
Exuding optimism, exporters’ body FIEO said this may be the beginning of a high-growth period for the sector. “Going by the current trend, exports could reach $360 billion in 2014-15. Most economies, barring a few countries in Latin America, are posting better results, which augurs well for India’s exports in the coming month,” an official release said.
But, the Commerce Ministry is not ready to celebrate yet. “Double-digit growth is encouraging after a period of low growth. If this trend continues I will definitely be saying there is a revival (in global demand). I would like to see what happens next month,” said Commerce Secretary Rajeev Kher, at a press conference.
Imports fell 11.41 per cent in May to $39.23 billion. Gold imports declined to $2.19 billion, plummeting 72 per cent from May 2013.
The Commerce Secretary indicated that the Government may rationalise gold import duties and relax import procedures in the forthcoming Budget. The trade deficit stood at $11.23 billion in May, which was 42 per cent lower than the $19.3 billion posted in the same month last year.
The recent appreciation in the value of the rupee against the dollar is unlikely to have a big impact on exports, said Kher.
According to Crisil, historical evidence suggested that global demand was more important than exchange rates in driving export growth. “With advanced economies’ growth expected to pick up to 2.2 per cent in 2014 from 1.3 per cent in 2013, we expect faster growth in India’s exports this year,” a Crisil release said.
Exports in the April-May period grew 8.87 per cent to $53.63 billion compared with the same period in the previous fiscal year. Imports fell 13.16 per cent in the first two months of the financial year to $74.95 billion, pulling the trade deficit down to $21.32 billion.