India's exports rose to a two-year high of 13% in August, mainly due to the improved global situation, enabling the trade deficit to fall to a four-month low of $11 billion, aided by subdued gold imports.
Gold imports, which have been pushing the current account deficit — the difference between dollar imflows and outflows — to record highs and putting pressure on the rupee, dipped to $0.65 billion in August from $2.2 billion a month earlier.
While exports rose 13% in August, imports declined 0.7% $37 billion. Oil imports rose 17.9% to $15 billion.
"Things are improving in Europe and the US," said Anand Sharma, commerce minister. "So signs of stability in the major economies including the UK and the positive growth in the US will lead to increase in demand."
He also cautioned on rising coal imports. "India is a country with abundant coal reserves but we ended up importing coal worth $16 billion...we need to reverse the trend and start mining our own coal and make it available for power production."
The commerce ministry is also working on ways to contain imports of non-essential goods, he added.
New markets such as Africa, Asia-Pacific, and South America have also played a major role in pushing India's exports, he said.