August export growth to be in double-digits: Commerce Secretary

Exports had jumped by 11.64% in July while imports fell, narrowing the trade deficit

Merchandise export in August is expected to be in double-digits once again and this upward trend is expected to continue in the months to come, according to commerce secretary SR Rao.

While export will continue to rise during rest of the months in this financial year, trade deficit is expected to narrow down on the back of import containment, Rao told Business Standard.

“Exports are looking up this month again while import containment is taking place. Exports sector is looking very promising now and we expect the trend to continue,” commerce secretary said.

Rao also added that the commerce department is still assessing the outcome of the issues discussed during the Board of Trade meeting that took place last month and accordingly sectors will be identified to give more support if and when required.

"An inter-ministerial consultation is going on what kind of sops are to be given and which all sectors need it,” he added.

Since the beginning of the fiscal, July was the first month when exports jumped by an unexpected 11.64% reaching $25.83 billion compared to $23.14 billion in the same month last year. On the other hand, imports in July reached $38.10 billion, down 6.20% from $40.62 billion in July last year.

According to some exporters and experts, this rise is mainly due to the sharp fall in rupee, which fell by over 20% since April. Some export sectors such as leather, handicrafts, engineering and carpets are showing promising growth as the import content in these are much less.

Federation of Indian Export Organisations (FIEO) believes that from October onwards exports might grow by more than 20%.

The commerce department is also pushing hard to bring export credit lending under priority sector lending to make available export credit at cheaper rate.   

A double-digit jump in exports and a fall in imports caused India’s merchandise trade deficit to narrow by 30% y-o-y in July. Imports declined partly due to a contraction in gold imports, on the back of recent restrictions imposed on it, according to CRISIL.

It said, however, to bring down imports substantially it is vital to arrest surge in coal imports, which has more than doubled in last five years reaching $14.7 billion in 2012-13 from $3.7 billion in 2006-07.