Exports Up 9.3% in the First Quarter, indicative of a revival backed by stability returning to the Eurozone and strengthening of US consumer demand

India Ratings & Research

India's exports grew 10.2% yoy to USD26.5bn in June 2014 and 9.3% yoy to USD80.1bn in 1QFY15. This is indicative of a revival in exports backed by stability returning to the Eurozone and strengthening of US consumer demand, believes India Ratings & Research (Ind-Ra). The World Trade Organisation expects global trade to grow at 4.5% in 2014.

The key items that pushed up export growth in June 2014 are oil seeds (44.4%), petroleum products (38.4%), handicrafts excluding handmade carpets (32.0%), tobacco (31.0%), marine products (27.5%), ceramic products and glassware (25.4%) and engineering goods (21.6%).

Reversing the trend observed till May 2014, imports grew by 8.3% to USD38.2bn in June 2014. However, for the 1QFY15 imports showed a contraction of 6.9%. According to Ind-Ra, the notable change on the imports front was the 65.1% yoy growth in gold imports in June 2014, which for the past several months had been contracting. While oil imports expanded by 10.9%, non-oil imports expanded by 7.0% in June 2014. Ind-Ra expects this trend to continue in the coming months of FY15 as the economy recovers.

The trade deficit for June stood at USD11.7bn and for 1QFY15 at USD33.0bn. These numbers are lower than the trade deficit recorded during the same month and quarter of FY14.

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