Exports hit 11month high in Feb. but gold pushed imports to $60 bn.
India’s merchandise exports grew 11.87% in February to hit an 11month high of $41.4 billion, while imports surged at a faster pace of 12.2% to hit $60.11 billion, thanks to a sharp spike in gold imports which hit a fourmonth peak of $6.15 billion.
February marks only the fifth occasion that India’s goods exports have registered positive growth in 202324, recording the highest uptick so far.
However, rising imports lifted the trade deficit to $18.7 billion from January’s 9month low of 17.5 billion.
“The export numbers in February have surpassed all our expectations, especially as it has been achieved despite tight monetary conditions in most markets, ongoing conflicts and lower commodity prices,” Commerce Secretary Sunil Barthwal said.
Exuding hope this year’s overall exports, including Services trade, may surpass last year’s record $776 billion, he said the World Trade Organization (WTO) has recently projected a higher 3.3% growth in world trade for 2024.
“We feel that this will now be a rising tide for exports that will show in 202425 too,” he reckoned.
In the first 11 months of the year, goods exports have contracted 3.5% to $395 billion, while imports have dropped 5.3% to $620 billion, narrowing the trade deficit to $225 billion from $246 billion in the yearearlier period.
“From trade deficit and current account deficit perspectives, there has been an improvement but rising imports of gold and electronics and the dip in exports of garments must raise a red flag,” Bank of Baroda Chief Economist Madan Sabnavis said. Low global demand has hurt exports of readymade garments (which is down 11%) and engineering goods, which are down 9.3% so far this year, he said.