India’s Exports Climb for First Time in 14 Months

Dec. 15 (Bloomberg) -- India’s exports climbed for the first time in 14 months as an economic recovery in the U.S. and Europe increased demand for the South Asian nation’s products before Christmas.

Overseas shipments rose 18 percent to $13.3 billion in November from a year earlier after sliding an average 21 percent per month since October 2008, according to data provided by the trade ministry.

Asian economies from China to Singapore are recovering from the worst global recession since the 1930s as record-low interest rates and more than $2 trillion in government stimulus helped revive demand. China’s exports fell 1.2 percent in November, the smallest drop in 13 months.

“The revival in India’s biggest markets and building of stocks before Christmas could be the reasons for a sharp surge in exports,” said D. H. Pai Panandiker, president of RPG Foundation, an economic policy group in New Delhi.

Accelerating export growth may boost production at companies and help with a faster revival in Asia’s third-biggest economy, which expanded 7.9 percent in the three months to Sept. 30 from a year earlier, the quickest pace in six quarters.

Overseas sales of gems and jewelry rose to $2.15 billion in November from a year earlier, while those of readymade garments rose to $727 million from $686 million. Shipments of petroleum products rose to $2.46 billion.

Some export segments have started showing growth and the nation’s overseas sales may see a steady positive trend by January, Trade Secretary Rahul Khullar told reporters in New Delhi today.

Low Base

“It’s too early to say we are out of the woods,” RPG’s Panandiker said. “A rise in the rupee is another negative factor, hurting exporters’ earnings.”

The rupee has strengthened 4.4 percent this year as foreign funds purchased $17 billion more Indian stocks than they sold, approaching the record $17.2 billion of net inflows in 2007. The benchmark Bombay Stock Exchange Sensitive Index has risen 75 percent, headed for the best year since 1991.

Exports may have jumped in November because of their low base in the same month last year when shipments slid almost 20 percent to $11.6 billion, Khullar said. “There is no need to go hoopla over these numbers,” he said.

The U.S. returned to growth in the third quarter after a yearlong contraction and France, Germany and Japan have exited their recessions. The U.S. economy, India’s second-biggest export market, expanded 2.8 percent in the July-September quarter.