India's merchandise exports rose sharply in September, belying fears of a slump due to disruption and working capital issues brought on by the introduction of the goods and services tax. Exports climbed 25.67% in September, exceeding an 18.1% increase in imports, helping narrow the trade deficit to $8.98 billion from $9.07 billion in September 2016.
In absolute terms, India's exports were pegged at $28.6 billion in September against $22.8 billion a year ago. Imports were up at $37.6 billion from $31.8 billion.
There were apprehensions that exports would take a hit because of GST, which was rolled out on July 1, with refunds getting blocked. The government has already eased GST rules for exporters to reduce transition pains and speed up refunds.
In rupee terms, both exports and imports grew at a slower pace -21.3% and 14% respectively from a year ago, showing the impact of the sharp appreciation of the rupee over this period.
The increase in exports was driven by a broad-based performance, with 26 of 30 categories posting positive growth. Outbound shipments of engineering goods grew 44.2%, chemicals (46%), petroleum products (39.7%), pharm (14.7%), readymade garments (29.4%) and gems and jewellery (7.1%).
Higher exports will support India's economy, which expanded 5.7% in the April-June quarter. Part of the increase in both exports and imports was because of the rise in commodity prices.