Cheering the rise in exports which reached a two year high of $27.2 billion in October, India Inc on Monday said the turnaround was on account of rebound in US and European economies and urged the Government to restore duty drawback rates to bring down the trade deficit.
"The steady rise in exports augurs well for the economy. Growing exports reflect the dynamism of Indian exporters as well as the impact of proactive support from the Government," Ficci President Naina Lal Kidwai said.
Recovery in global markets pushed the country's exports to a two year high of 13.47 % to $ 27.2 billion in October even as trade deficit worsened on account of rise in gold imports.
"A smart 13.47% increase in exports for October, the fourth consecutive monthly rise, is a reflection of an authentic turnaround in India's external trade -- thanks to signs of improvement in Europe and in the US," Assocham Secretary General D S Rawat said.
Overall imports declined by 14.5% to $ 37.8 billion in October as compared to the same period last year.
"With imports falling by a big gap of 14.50% and non-imports by even bigger margin of 22.80%, worries over current account deficit (CAD) should recede, Rawat said.
Trade deficit jumped to $10.5 billion as against $6.76 billion in September this year. The trade deficit in October 2012 was at $20.2 billion.
"Exports in the last three months have come to positive growth trajectory due to stability in the global market, particularly with our large trading partners like US and Europe," Sanjay Budhia, Chairman, National Committee on Exports and Imports of CII said.
"Continuous growth momentum in exports will help recovery in IIP in the coming times," President of PHD Chamber of Commerce and Industry Suman Jyoti Khaitan said.
"While exports have shown a convincing rebound, the tempo can be sustained and improved by further making Indian products competitive in the global market where green shoots are visible," Chairman of engineering export body EEPC India Anupam Shah said.
Besides, industry bodies also urged the government to restore duty drawback rates.
"CII strongly recommends restoration of Duty Drawback Rates which have been reduced drastically last month. This will further help in gaining and maintaining India's share in the global market," Budhia said.
Duty drawback is the refund of duties on inputs imported for export items.
"Finance Ministry should immediately address the issue of duty drawbacks which were cut for the engineering exporters," Shah said.
The government had recently rationalised the duty drawback and brought more items under the scheme for tax refund to exporters. It had reduced the rates for different engineering items.