NEW DELHI: India’s exports jumped to a six-month high in May, data showed yesterday, in an encouraging sign for new Indian Prime Minister Narendra Modi who has pledged to reform and revive the struggling economy.
Exports lept 12.40 percent from a year earlier to $28bn in May, thanks to increased demand from Western countries and a weaker rupee which made the nation’s goods more competitive.
Imports were down 11.41 percent to $39.23bn helped by a 72 percent fall in overseas gold purchases, the commerce ministry data showed.
India, the world’s largest buyer of gold, has made strenuous efforts to constrain imports of bullion to lower its current account deficit—the widest measure of trade—that hit a record high last financial year.
The trade gap widened to $11.23bn in May from $10.09bn the previous month, but it was lower than the $19.37 recorded a year earlier, yesterday’s data showed.
Commerce Secretary Rajeev Kher described the figures as an “encouraging sign” as the new government looks to strengthen trade ties including with the United States to boost the sluggish economy. Kher said it could lift the hefty 10 percent import duty slapped on gold last year as part of measures aimed at heading off a balance of payments crisis.
The high deficit fanned worries about a balance of payments crunch and put pressure on the rupee which sank to a record low before retracing its losses.
Despite the stronger exports, analysts cautioned that conditions were still fragile, with stubbornly high inflation and a second straight year of sub-five percent economic growth.