Ex­ports Be­lie Slump Fears, Climb 26%

Trade deficit nar­rows to $9b as ex­ports growth ex­ceeds the 18.1% in­crease in im­ports; rise in com­mod­ity prices helped: Ex­perts

The Economic Times - - Companies & Economy - Our Bu­reau 26 out of 30 sec­tors re­port growth Engi­neer­ing goods, chem­i­cals and ready­made gar­ments post strong growth Gold im­ports moder­ate af­ter a surge Higher com­mod­ity prices help boost trade

New Delhi: In­dia’s mer­chan­dise ex­ports rose sharply in Septem­ber, be­ly­ing fears of a slump due to dis­rup­tion and work­ing cap­i­tal is­sues brought on by the in­tro­duc­tion of the goods and ser­vices tax.

Ex­ports climbed 25.67% in Septem­ber, ex­ceed­ing an 18.1% in­crease in im­ports, help­ing nar­row the trade deficit to $8.98 bil­lion from $9.07 bil­lion in Septem­ber 2016.

In ab­so­lute terms, In­dia’s ex­ports were pegged at $28.6 bil­lion in Septem­ber against $22.8 bil­lion a year ago, ac­cord­ing to data re­leased by the com­merce de­part­ment on Fri­day. Im­ports were up at $37.6 bil­lion from $31.8 bil­lion. “Con­tin­ued im­prove­ment in the pace of growth of mer­chan­dise ex­ports, as well as its fairly broad­based na­ture, sug­gest that con­cerns that arose af­ter the tran­si­tion to GST may be re­ced­ing in some sec­tors,” said Aditi Na­yar, prin­ci­pal econ­o­mist at ICRA.

There were ap­pre­hen­sions that ex­ports would take a hit be­cause of GST, which was rolled out on July1, with re­funds get­ting blocked. The gov­ern­ment has al­ready eased GST rules for ex­porters to re­duce tran­si­tion pains and speed up re­funds.

“In con­tin­u­a­tion with pos­i­tive growth ex­hib­ited by ex­ports for the last 13 months, ex­ports dur­ing Septem­ber 2017 have shown growth of 25.67% in dol­lar terms,” the min­istry said in a state­ment.

“We need to see if the trend con­tin­ues for the next quar­ter and wheth- er this growth trend will be main­tained... GST has not had much im­pact on the ex­port num­bers and go­ing for­ward, with many gaps ad­dressed by the gov­ern­ment, the re­sult should be pos­i­tive,” said Ma- dan Sab­navis, chief econ­o­mist at CARE Rat­ings.

In ru­pee terms, both ex­ports and im­ports grew at a slower pace — 21.3% and14% re­spec­tively – from a year ago, show­ing the im­pact of the sharp ap­pre­ci­a­tion of the ru­pee over this pe­riod.

The in­crease in ex­ports was driven by a broad-based per­for­mance, with 26 of 30 cat­e­gories post­ing pos­i­tive growth. Out­bound ship­ments of engi­neer­ing goods grew 44.2%, chem­i­cals (46%), petroleum prod­ucts (39.7%), pharm (14.7%), ready­made gar­ments (29.4%) and gems and jew­ellery (7.1%).

“In our view, build-up of sub­stan­tial stocks over the last few months would ease the vol­ume of gold im­ports dur­ing the fes­tive and wed­ding sea­son,” said Na­yar.

Higher ex­ports will sup­port In­dia’s econ­omy, which ex­panded 5.7% in the April-June quar­ter. Part of the in­crease in both ex­ports and im­ports was be­cause of the rise in com­mod­ity prices.

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