Mumbai: India’s manufacturing exports rose for a third straight month in January and new orders hit an 18-month high in February—further evidence of the country’s solid economic rebound.
January merchandise exports hit $14.3 billion (Rs65,780 crore), 11.5% higher than the same month a year ago, while imports grew 35.5%, to $24.7 billion, the ministry of commerce said Tuesday. Exports shrunk for 13 months before turning positive in November.
The data will likely encourage the central bank to hike interest rates when it meets in April.
The rising exports along with data from HSBC Markit Economics showing that new manufacturing orders hit an 18-month high in February—suggest that India’s stimulus-led rebound is effectively taking root in the private sector.
Increasing new orders, rising output and robust hiring, driven by domestic demand, pushed the HSBC Markit Purchasing Managers’ Index to its third straight month of expansion. Employment rose at the swiftest pace in 19 months, the survey showed.
“The balance of companies are now hiring again and at an historically robust rate,” HSBC economist Robert Prior-Wandesforde said in a note. “In our view, it is time to start unwinding the monetary stimulus and we would be very surprised if the RBI (Reserve Bank of India) were not to raise policy rates at the 20 April meeting.”
Goldman Sachs economists called India’s disappointing October-December 6% gross domestic product growth “transitional”, as private spending begins to pick up and government spending wanes.
“We expect the role of the government to gradually lessen, while that of the private sector, especially fixed investment, to grow stronger,” economist Tushar Poddar wrote in a note on Tuesday.