India's exports jumped by 56.9 per cent year-on-year to $25.9 billion in May maintaining the growth momentum that began last fiscal.
Along with rising exports, the imports too went up by 54.1 at $40.9 billion during the month, pushing up the trade deficit to $15 billion during May. Imports grew highest in the last four years.
"I am sure, we will continue with strong performance so that current account deficit can be kept manageable," Commerce and Industry Minister Anand Sharma said.
Commerce Secretary Rahul Khullar said the trade gap is much larger than it had been in the last 2-3 years.
"It is a matter of concern. It is because of the volatility in petroleum prices. The oil prices have skyrocketed because of number of factors including the developments of last few months in Middle East," Sharma said.
The minister said that India being a major importer of petroleum products, the situation needs to be carefully watched.
The country's petroleum and oil lubricants imports in May increased by 18 per cent to $10.16 billion.
Federation of Indian Export Organisation too said the high trade deficit of $15 billion is a cause of concern and that domestic manufacturing should be encouraged to raise output.
". . .but I should be ready for the eventuality that this (increasing trade gap) may turn out to be a feature for the next couple of months," Khullar said, adding, "If it is a recurrent feature of the next couple of months then I have to be concerned".
However, the secretary said that it is not the time to start 'ringing alarm bells'.
During April-May 2011-12, exports increased by 45.3 per cent to $49.8 billion.
During the first two months of 2011-12, sectors which registered healthy growth include engineering (115 per cent), electronics (80 per cent), drugs (68 per cent), petroleum (64 per cent), gems and jewellery (23 per cent), ready made garments (31 per cent), chemicals (44 per cent) and leather (21 per cent).
However,
Imports during the first two months of the current fiscal grew by 33.3 per cent to $73.7 billion.
The trade deficit during the period stood at $23.9 billion.
During the period, imports of petroleum increased by 12.9 per cent to $20.3 billion, pearls and precious stones by 24.6 per cent to 5.2 billion, gold and silver by 13.5 per cent to $13.5 billion and machinery by 46.7 per cent to $5.9 billion.
Sharma said the Directorate General of Foreign Trade would undertake a sectoral review of exports and complete it in 45 days.
"(Through the review) we will have the correct appraisal of the state of play as to where our exports are headed in 2011," he said.
In May, the sectors which registered healthy exports growth include engineering (120 per cent), petroleum (75 per cent), readymade garments (51 per cent), man-made yarns and fabrics (50 per cent) and electronics (117 per cent).
However, Khullar said that due to financial problems in European markets and less then expected rise in employment in the US, "it is not going to be easy summers (for Indianexporters)".
During April-May this fiscal, imports of electronic goods increased by 61 per cent, chemicals (9.6 per cent), coal (19 per cent), transport equipment (32.7 per cent), ores and scraps (22 per cent) and vegetable oil (35 per cent). However, fertiliser and iron and steel imports declined by 35 per cent and 13 per cent respectively.
