Exports On The Go, As Imports Decline

During the last month (May, 2014) Indian export showed a significant improvement and posted double-digit growth of 12.40 % in dollar terms, to USD 27.9 billion against USD 24.9 billion in the same period of last year. This considerable growth was mainly driven by shipments of key commodities, like engineering goods, petroleum products, readymade garments and pharmaceuticals which showed strong growth. 

If we look at cumulative value of exports for the period April-May 2014-15, it stood at USD 53.6 billion (Rs 3.2 lakh crore) as against USD 49.2 billion (Rs 2.7 lakh crore) in April-May 2013-14,  registering a growth of 8.87 per cent in dollar terms and growth of 19.04 per cent in rupee terms over the same period last year. 

On the other hand, imports during the said period showed a decent decline of 11.41% yoy (in dollar terms) and stood at USD 39.2 billion (Rs.2.3 lakh crore) against USD 44.2 billion (Rs 2.4 lakh crore) in May, 2013. Further, cumulative value of imports for the period April-May 2014-15 was USD 74.9 billion (Rs 4.5 lakh crore) as against USD 86 billion  (Rs 4.7 lakh crore) in April-May 2013-14, registering a negative growth of 13.16% in dollar terms and negative growth of 5.05% in rupee terms over the same period last year. 

Imports continued to be the same during this month also mostly due to the declining gold imports as the government has increased import duty on gold and introduced 80:20 rule, to further discourage its import. Increasing export while import is decreasing is a good indication for the economy as it will further narrow CAD deficit and appreciation of the domestic currency.