India's import growth plummeted to 6.8 per cent in October from a year ago, the lowest in seven years, even as exports rose 21.3 per cent to $18 billion in the month. Exports thus outpaced imports for the first time this year.
Revealing these figures, commerce secretary Rahul Khullar on Monday said the country's trade deficit stood at $9.7 billion in October against $9.12 billion in September.
Trade deficit in August had widened to a 23-month high of over $13 billion, and Khullar had said the deficit could touch $135 billion for the entire fiscal, higher than his earlier forecast of $120 billion. The government is targetting close to 15 per cent export growth in the current fiscal. On Sunday, commerce minister Anand Sharma said the merchandise shipments would cross the $200-billion target for 2010-11.
The figures also reinforce the perception that India's domestic economy is slowing down but exports continue to grow at a fast rate, indicating an improving external environment.
The single digit growth in imports comes on the heels of a below expectation 4.4 per cent rise in industrial production in September, largely due to a contraction in production of capital goods.
The sharply lower growth in imports and the 21.3 per cent rise in exports in October helped keep the merchandise trade deficit below $10 billion of second month running.