New Delhi: India's exports grew by a double-digit pace for the first time in seven months in May, narrowing the trade deficit and setting the ground for easing of restrictions on gold imports.
Exports last month rose 12.4 per cent to USD 28 billion from a year earlier, while imports fell 11.4 per cent to USD 39.23 billion, the Ministry of Commerce & Industry said.
The twin effect led to the trade deficit narrowing to USD 11.23 billion from USD 19.37 billion a year earlier. The gap, however, was wider than April's USD 10.1 billion and at a 10-month high.
According to the Commerce Ministry's data, gold imports, which had in 2013 led to a widening of the trade deficit and consequently a worsening current account deficit (CAD), fell 72 per cent to USD 2.19 billion.
Encouraged by the trade data, the Commerce Ministry has asked the Finance Ministry to ease gold import restrictions, which were imposed last year to check the widening CAD.
"It is definitely an encouraging sign," Commerce Secretary Rajeev Kher told reporters here. "If this trend sustains then I am sure we are reviving... It seems that they (export products) are now acquiring their natural levels."
Kher said his ministry was in favour of rationalisation of levies and rules related to gold imports. The government increased the import tax on gold to the current level of 10 per cent.
He said the appreciating rupee was not a factor in the double-digit export growth.
"There is a positive spirit and if this trend continues the next month then I will definitely be saying that there is a revival (in global demand). So, I would like to see the next month also," he added.
Asked about the export target for 2014-15, he said: "We are working towards something like USD 1 billion exports on a daily basis."