New Delhi: The country’s export growth accelerated in June as companies shipped more gems, oil and other manufactured products to overseas markets.
Shipments, which account for about 15% of the economy, rose 23.5% to $14.66 billion (Rs62,158 crore today) from a year earlier, after gaining 13% in May, the government said in a statement on Friday. Imports increased 26% to $24.45 billion, widening the trade deficit to $9.78 billion.
Overseas sales are rising as companies boost shipments to Europe, Japan and other developing Asian countries to counter slowing demand from the US, India’s biggest export market. Still, shipments may weaken later this year as soaring inflation and flagging growth crimps spending by customers abroad.
“Selling goods in new markets and diversifying products portfolio is helping cushion the downslide in exports,” said Shubhada M. Rao, chief economist at Yes Bank Ltd in Mumbai. A “global slowdown” will hurt sales of Indian goods overseas later this year, she said.
Weaker growth in the US, Asia’s biggest market, is crimping exports from the region. Japan’s overseas sales fell for the first time in four years in June and shipments from China grew 17.6%, slower than May’s 28.1%.
The share of the US in India’s total exports declined to 13.1% in the 11 months to February, compared with 15% in the year-ago period, according to the latest breakdown of overseas sales released by Reserve Bank of India. The country gives a more detailed analysis of exports five months after releasing initial data.
Indian exporters are benefiting from a weaker rupee, said Sonal Varma, a Mumbai-based economist at Lehman Brothers Inc. The rupee has declined 7.3% this year as crude oil advanced 27%, reaching a record $147.27 per barrel on 11 July. A weaker rupee adds to the value of exports, helping companies’ earnings.
Exports in the three months ended 30 June rose 22.3% from a year ago to $42.8 billion, Friday’s report showed.
India’s oil imports in June rose 53.4% to $9.03 billion as Indian refiners paid more for crude oil purchased overseas. India relies on imports of oil for three-quarters of its energy needs. Non-oil imports gained 14% to $15.4 billion.