The country’s export of goods surged to $16.1 billion in May, which is up 35.1 per cent from $11.9 billion in the same month last year. However, the growth declined a tad from April when merchandise exports reached $17 billion, registering an increase of 36.2 per cent year-on-year.
Imports for May grew by 38.5 per cent to $27.43 billion year-on-year as against $19.80 billion in the same month last financial year. The rise in imports was mainly due to significant growth in oil imports during the month, which rose by a whopping 66.7 per cent in May at $8.84 billion from $5.30 billion last year.
According to trade analysts, a low base effect is responsible for the rise in exports since the beginning of the financial year. “The base effect is likely to wear out from September,” said Rohini Malkani of Citibank.
Trade deficit, or the difference between exports and imports, reached $11.33 billion in May, according to official data released today by the Ministry of Commerce and Industry.
The trade deficit was the highest since November 2008 and this was mainly due to a rise in the demand for oil, iron and steel and leather products by Indian industries, which is witnessing a gradual recovery.
On a cumulative basis, the trade deficit during April-May was up $21.7 billion compared to $14.5 billion in the same period last year. India’s trade deficit for the current financial year is likely to expand to $123 billion from $102.1 billion in 2009-10, on the assumption that export growth would average at 16.6 per cent and imports at 18 per cent, Citibank said in a report.
Meanwhile, non-oil imports during May reached $18.59 billion, 32.3 per cent higher than $14 billion in the month a year ago. Export of gems and jewellery rose 31.24 per cent to $2.46 billion on growth in the exports of cut and polished diamonds.
Export of passenger cars, two-wheelers and three-wheelers also grew sharply in May by almost 50 per cent over the corresponding month last year with a record 179,130 units being exported, the highest so far.
Earlier, while releasing the initial export figures for May, Commerce Secretary Rahul Khullar had said that even though exports were currently rising compared to the fall seen last year due to the slump in demand, the growth is still “much below the 2008 level” when exports were between $18 billion and $20 billion.
A Sakthivel, president, Federation of Indian Export Organisations, and president of Tirupur Exporters Association, said: “This growth is not real. It is mainly because we saw a major fall in exports last year. Also, the stimulus given to the export sector has played a major role in boosting export performance.”
