Led by smart performance of engineering goods, petroleum products and ready made garments, export growth hit a six-month high of 12.4 per cent in May. Exports rose to $28 billion during the month from $24.91 billion in May 2013.
“The return to double-digit growth after several months is encouraging news, but we will watch the exports performance in the next month to see if this return to the trend is sustained, and there is, in fact, a revival of global demand,” Commerce Secretary Rajeev Kher told reporters, releasing the trade data.
Imports in May shrunk 11.4 per cent to $39.23 billion, narrowing the trade deficit by 42.01 per cent to $11.23 billion.
Engineering goods exports grew 22.09 per cent to $6.1 billion. Petroleum products surged 28.7 per cent to $5.9 billion and readymade garments to $1.49 billion or nearly 25 per cent higher than in May, 2013.
Drugs and pharma exports rose almost 10 per cent to $1.35 billion.
The export performance of gems and jewellery, however, remained lacklustre owing to the Reserve Bank of India’s continuing import restrictions on gold for keeping under control the current account deficit (CAD) and its impact on the rupee-dollar exchange rate. Exports rose marginally by 1.36 per cent to $3.43 billion.
Mr. Kher said gold import restrictions were starving gems and jewellery exporters of inputs and the RBI must review them now that CAD was no longer widening has in fact been narrowing.
“We are in discussions with the Finance Ministry over both the levels of the import duty on gold and the manner in which the import restrictions are operated,” said Mr. Kher.
Import of gold slid sharply by 72 per cent to $2.19 billion from $7.7 billion in May, 2013. Silver imports fell by 37 per cent to $0.41 billion. While at $24.76 billion, non-oil imports in May were nearly 18 per cent lower than in the same month last year, oil imports saw a drop of 2.5 per cent to $14.46 billion.
