India's trade deficit drops to 30-month low; exports jump

India's exports rose by 11.15 percent to $27.68 billion in September while imports dipped by 18 percent, helping to narrow trade deficit to a two-and-a-half-year low, government data showed Wednesday.

According to data released by the commerce ministry here, imports contracted by 18.10 percent to $34.44 billion in September, leaving a monthly trade deficit of $6.76 billion. This is the lowest trade deficit since March 2011.

Trade deficit was recorded at $10.9 billion in August and $12.27 billion in the previous month.

Trade deficit has dropped sharply in the recent months due to lower imports of gold and other precious metals.

Talking to reporters here, Commerce Secretary S.R. Rao said lower imports of non-essential commodities like gold have helped narrow the trade gap.

"The government has taken conscious steps to curtail imports of non-essential commodities, essentially precious metals," Rao said.

"That is working out as the government intended," he added.

Cumulative trade deficit for the first six months of the current financial year has dropped to $80.12 billion, as compared to $91.82 billion recorded in the same period last year.

Lower trade deficit is raising hope for a significant reduction in the country's current account deficit, a major macro-economic problem that has created huge volatility in the currency and equities markets.

Value of exports for April-September period of this year stood at $152.10 billion, 5.14 percent higher than the $144.67 billion exports registered during the corresponding period of last year.

Cumulative value of imports for the first six months of the current financial year is $232.23 billion as compared to $236.49 billion recorded in the same period last year, registering a decline of 1.8 percent.