CHENNAI: Driven by higher demand for engineering goods and petroleum products, India’s exports grew 27.6 per cent in March to $29.23 billion. Imports, too, expanded 45.25 per cent to $39.66 billion from $27.3 billion a year ago, data released by the government on Thursday showed.
While the pick-up in exports bolstered the country’s $2-trillion economy, still smarting from the Narendra Modi government’s decision in November last year to pull out high-value currency notes from circulation, the spike in gold imports pushed up trade deficit to $10.43 billion in March 2017 from $4.4 billion in the same month last year.
“Based on the wider than expected merchandise trade deficit in March 2017, the current account deficit is likely to print at $16.5-17.5 billion in FY17,” said Aditi Nayar, principal economist at ICRA.
The import of the precious metals rose to $4.17 billion in March 2017 compared to $973.45 million last year.
For 2016-17 (full year), the growth in exports was 4.71 per cent at $274.64 billion against $262.3 billion in 2015-16.
The growth in exports is due to base effect, Suresh Babu, associate professor of economics at IIT Madras, told Express.
“It is base effect as the growth is on a low base. Imports also grew, especially oil and gold; so current account deficit worries continue. Also, it is just one month, March, that has a whopping growth rate but there is slow global revival,” he noted.
The numbers also augur well for Modi’s plan to lift India’s share in global trade to five per cent by 2020. Indian goods exports currently account for a modest 1.6 per cent of global trade, compared with China’s 14 per cent.
Petroleum imports almost doubled to $9.7 billion in March 2017 from a year ago, while gold imports rose four-fold to $4.2 billion.