India's exports rose an annual 18.2 percent in November to $13.2 billion, the first rise after 13 straight months of decline indicating a partial recovery, the government said on Friday. Analysts said it was too early to view the year-on-year exports growth as a firm revival due to a low base effect.
"The growth in exports is partly due to a low base of exports last year during this period and partly due to a recovery in global demand. I hope growth can be sustained and exports are put on a growth path," said Rajiv Kumar, an economist at Indian Council for Research on International Economic Relations (ICRIER), a New Delhi-based think tank.
India's trade minister Anand Sharma said in December that the exports have stabilised and would get back on the growth track. The country's imports dropped 2.6 percent in November from a year earlier to $22.88 billion, while the trade deficit shrunk to $9.69 billion from $12.33 billion a year earlier.
Analysts, however, said the 7.3 percent year-on-year rise in oil imports in November to $6.39 billion indicates the possibility of a rise in oil import bill and trade deficit in coming months. "The rise in oil imports is due to... higher demand from the domestic industry, which has shown strong growth in the third quarter," said N.R. Bhanumurthy, an economist at National Institute of Public Finance and Policy, a New Delhi-based think-tank.
While exports may continue to show positive growth in the remaining months of the current fiscal year due to a low base effect, it would be difficult to sustain double-digit growth as the November rise was partly due to higher pre-Christmas exports, he added. Exports contribute close to a fifth of India's gross domestic product and Asia's third largest economy is expected to grow by over 7 percent in 2009/10.
Exports for April-November, the first eight months of the 2009/10 fiscal year, were down 22.3 percent at $104.25 billion from the same period in the previous year. C. Rangarajan, chairman of Prime Minister Manmohan Singh's Economic Advisory Council had said in October exports could touch $188.9 billion this fiscal ending March, the level achieved in 2008/09.
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