Higher annual growth in merchandise exports for the third straight month and a number of measures to curb gold imports helped narrow the trade deficit to a 30-month low of $6.7 billion during September, according to provisional government data on Wednesday.
With this, the trade gap has touched its lowest since March 2011 as merchandise exports surged to a six-month high of $27.68 billion in September. Imports plunged to a two-and-a-half-year low of $34.44 billion during the same period mainly on the strength of crude oil imports falling 5.9 per cent to $13.2 billion.
This development strengthens the outlook for the rupee which has been stabilising against the dollar in October after depreciating steeply in the last five months.
An optimistic Commerce and Industry Minister Anand Sharma said that the Indian economy is seeing a turnaround both in terms of growth in manufacturing and domestic demand.
"The fall in imports is due to measures of the government on precious metals and petroleum products. In the month of September, there has been a slight curtailment of import of petroleum as well which is again what the government intends... these two have resulted in good containment of imports," Commerce Secretary S R Rao said.
Trade deficit in the April-September period narrowed sharply to $80.12 billion from $91.82 billion a year ago. Shipments of engineering, textiles and pharmaceutical sectors have helped push overall exports, Rao said.
Iron ore exports, which have now resumed, touched $170 million in September as against $21 million a year ago.
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