India’s exports grew at its fastest pace in multiple years by 17.5% in February while imports were up 21.8%, government data showed on Wednesday.
Analysts were cautious in indicating to a revival in global trade and uptick in industrial growth as the February numbers came on the back of a decline in exports and imports in the same month last year.
Exports were up 17.5% at $24.49 billion in February while imports were up 21.8% at $33.39 billion leaving a trade deficit of $8.9 billion.
During April-February, exports grew just 2.5% to $245.41 billion while imports were down 3.7% at $340.7 billion, leaving a trade gap of $95.29 billion.
“The impressive growth comes in the backdrop of a decline in exports during the same period last year. One needs to see a secular trend to arrive at a conclusion that exports have revived in a big way,” said Madan Sabnavis, chief economist of CARE Ratings.
Exports have been shrinking since December 2014 to September 2016, due to weak global demand and slide in oil prices.
India’s exports revived in September after falling by 0.3% in August and 6.8% in July. India’s exports reversed the negative trend in June when it grew 1.3% after remaining in the red for 18 months.
India’s oil imports were up by a whopping 60% at $7.68 billion while non-oil imports grew 13.65% at $25.7 billion.
During April-February, oil imports were down 1.8% at $76.74 billion while non-oil imports declined 4.2% to $263.95 billion.
India’s merchandise exports contribute just 1.6% of global trade. The Narendra Modi aims to lift India’s share to 5% by 2020 but rising protectionism in the US.
US President Donald Trump’s “America First” restrictive policies coupled with Britain’s surprise Brexit vote last year to leave the European Union has clouded the global trade outlook.
Modest global oil prices have helped India rein in the oil import bill even though the petroleum exports also suffered.
India’s current account deficit narrowed to 0.3% of GDP in April-September from 1.5% in H1 of FY16 on the back of the contraction in the trade deficit.
Faster exports growth raises chances of some industrial recovery even as domestic demand was crimped by the demonetisation.
RBI has recently lowered its growth projection sharply to 7.1% for FY17 from 7.6% estimated earlier.
India’s stats office estimated GDP growth at 7.1% for 2016-17, much slower than 7.9% in 2015-16.