Though terming it encouraging, commerce secretary Rajeev Kher said that only when the growth continues next month will it be termed as a revival.
Releasing the trade data today, the secretary, on an optimistic note, also said, there is a positive spirit ... One would wish that this sustains. Clearly one thing that is discernible, in May we dont have a history of rise in absolute number. If you look at these numbers, they are now acquiring their natural levels ... So it shows that we could be resuming the trend. We will monitor it.
According to the data, exports stood at $27.99 billion, growing 12.4 per cent year-on-year while imports stood at $39.23 billion, contracting 11.41 per cent during the month. The trade deficit stood at $11.23 billion compared to $19.37 billion in the corresponding period last year. However, the deficit was highest in the last 10 months. It stood at $10.09 billion in April.
The WTO upgraded the trade forecast for 2014 to 4.7 per cent from 4.5 per cent, though still below the 20-year average of 5.3 per cent.
It expects a 5.3 per cent increase in trade in 2015. Encouraged by improving trade, Kher, when asked about the trade target said, We are working towards something like $1 billion exports on a daily basis.
During the month, export from sectors including engineering, petroleum products, ready-made garments (RMG), gems and jewellery, drugs, cotton yarn and organic and inorganic chemicals showed a robust growth.
The growth during the month has to be seen in the context of last year. It had dipped last year so base effect has to be factored in. However, sluggishness in imports is worrying. We have to look at it in context of industrial production, which has been performing badly, and decline of gold import, Biswajit Dhar, a trade expert, said.
He added that under the current circumstances it would be too early to say that recovery has started.
On the imports side, gold imports declined 72 per cent and silver imports shrank 37 per cent while oil imports were 2.5 per cent higher during May.