India’s exports posted double-digit growth in August for the second consecutive month, while imports declined, shrinking the trade deficit to $10.9 billion and giving some respite to the falling rupee.
Rising international prices of crude oil may, however, put pressure on the country’s import bill and trade account in the days to come, Commerce and Industry Minister Anand Sharma cautioned.
For April-August 2013-14, the trade deficit declined to $73.36 billion ($74.67 billion).
In August, exports rose 12.97 per cent to $26.14 billion, the highest in about two years, compared with $23.13 billion in August 2012, largely due to incentives announced by the Government over the past few months, Sharma said at a press conference here on Tuesday.
Economic stability in the major European Union economies, including the UK, and the growth in the US helped exporters and will continue to result in higher demand for Indian products in the coming months, the Minister added.
“We are in firm positive terrain with exports growing in double digits. Our imports are also down and we are closing the big gap in our trade account. We are optimistic that we will remain in the positive terrain (the rest of the year),” Sharma said.
Imports during the month declined 0.68 per cent to $37.05 billion, with gold inflows falling to $0.65 billion compared with $2.20 billion last month as a result of higher duties and import curbs imposed by the RBI. Oil imports rose 17.88 per cent in August to $15.09 billion.
“Historically, India has had a current account deficit. Petroleum plays a far greater role in it than gold. There has been a spurt in Brent crude price in the last 10 days, which will put pressure on our import bill,” Sharma said.
Iron ore exports
The Commerce Department will also take steps to raise iron ore exports, hit by the Supreme Court’s ban on mining in Karnataka and Goa. “We will, if required, in cases of States where some problem exists, take it up with the judiciary,” he added.
Most sectors that significantly contribute to India’s export basket, apart from jewellery, are posting export growth, said DGFT Anup Pujari. The engineering sector, which had been experiencing a decline till July, also posted positive growth in August. Cumulative exports during April-August 2013 increased 3.89 per cent to $124.46 billion ($119.771 billion). Imports during the period grew 1.72 per cent to $197.79 billion ($194.44 billion).