Merchandise exports grew 6 per cent year on year in September, the first rise since February, and a contraction in imports narrowed to 19.6 per cent from 26 per cent in the previous month, suggesting a gradual return towards normalcy.
Consequently, trade deficit narrowed to just $2.78 billion in September from $6.77 billion in the previous month, showed the quick estimate of the trade data released by the commerce ministry on Thursday.
Importantly, the outbound shipment of core products (goods excluding petroleum and gems & jewellery), which reflects the economy’s competitiveness, grew as much as 11.9 per cent in September, against a 3.2 per cent fall in August. The growth in core exports indicates a nascent recovery in external demand.
Exports in September rose to $27.58 billion from $26 billion a year before. Imports shrank to $30.31 billion last month from $37.69 billion a year earlier. As many as 22 of the 30 major product groups witnessed growth in September, a first in the current fiscal.
Earlier this month, however, the ministry had released a “preliminary estimate” of trade data, according to which merchandise exports had grown by 5.3 per cent, year on year, in September.
Interestingly, core exports have accelerated at a quicker rate than that of overall merchandise exports month after month since May 2019, according to an FE analysis, based on the data from the Directorate General of Commercial Intelligence and Statistics.
Among the well-performing segments, exports of rice jumped by more than 94 per cent year on year in September to $725 million, while those of drugs and pharmaceuticals surged by 24.4 per cent to $2.24 billion, iron ore by 110 per cent to $304 million. Engineering goods exports rose by 5.4 per cent to $6.9 billion, while petroleum shipment rose 5 per cent to $3.6 billion last month.
Analysts have said these are still early days, although the rebound in core exports in September points at a potential pick-up in external demand in the build-up to the crucial Christmas season, when orders from the key western markets-the US and the UK-flow in large volumes. —FE
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