India's April exports jump; growth seen slowing

A worker hangs yarn dipped in dye to dry at a mill on the outskirts of Agartala in this June 8, 2007 file photo. India's exports grew a robust 31.5 percent in April from a year earlier to $14.40 billion, while higher imports of costly oil dragged the trade deficit out to $9.87 billion, official data showed on Monday.

NEW DELHI (Reuters) - India's exports grew a robust 31.5 percent in April from a year earlier to $14.40 billion, while higher imports of costly oil dragged the trade deficit out to $9.87 billion, official data showed on Monday.

Figures released by the Commerce and Industry Ministry showed imports rose by 36.6 percent to $24.2 billion, compared with $17.8 billion in the same month a year ago.

Oil imports in April stood at $8.03 billion, 46.2 percent higher than in the same month of 2007.

India imports 70 percent of its oil needs, and the surge in the cost of oil imports widened the trade deficit in April by 30.96 percent from the year-ago month.

"The deficit is on expected lines due to higher oil prices and is likely to remain high, but I don't see any crisis," said Saumitra Chaudhuri, economic adviser at domestic credit rating agency ICRA.

But other analysts expect exports to come under pressure in the months ahead.

"With a global slowdown, you should not expect exports to grow at a rapid pace. They will definitely face headwinds," said Biswajit Dhar, a trade expert at the Indian Institute of Foreign Trade.

The World Trade Organisation said last month global trade growth would slow to a six-year low in 2008 although financial market turbulence and slowdowns in some developed economies have so far had little effect.

India's exports grew by 23 percent to $155.5 billion in 2007/08, just missing an annual target of $160 billion.

Non-oil imports, a key indicator of domestic demand, grew 32.3 percent to $16.25 billion from $12.28 billion a year ago, suggesting a rebound in industrial output growth in the month.

Indian crude oil refiners, the biggest buyers of dollars in the currency market, have been very active in the past few weeks pushing the rupee down to a 13-month low of 43.21 per dollar on May 22.

It has fallen around 7.0 percent so far this year, bringing some cheer to exporters.