India expects to maintain double-digit growth in exports this fiscal despite fragile global recovery and trade tensions. Exports rose 12.54 per cent in the first six months of this financial year. However, this could not widen the trade deficit, which fell to a five-month low as the pace of import growth also slowed.

Imports rose by 10.45 per cent in September, against 25.41 per cent in August. September import growth was the second lowest this fiscal year, after the April growth figures of 4.6 per cent, bringing the trade deficit down. The trade deficit is the lowest in five months, despite high oil prices. Notwithstanding the dip in the trade deficit in September, the current account deficit is expected to triple in the second quarter of fiscal ’19, or around three per cent of GDP, from the second quarter of fiscal ’18.

Given the country’s dependence on imported fuels, the elevated crude oil prices and the modest expected impact of the measures initiated so far to reduce the trade deficit, the current account deficit is now expected to widen significantly to be about 2.9 per cent of GDP in the current fiscal year. Though there was a marginal contraction of exports in September, primarily due to the high base effect last year, the aggregate value of exports in September is more than in April, June and July.