Export rebound continues, but government target too ambitious

Trade data for November show that export values continued to recover last month. Looking ahead, export growth should remain positive, but the government’s target of nearly doubling export values from FY14/15 levels by FY20/21 looks too ambitious. he widening in the monthly merchandise trade deficit from US$10.4bn in October to US$13bn in November doesn’t alter our view that India’s current account position is unlikely to return as a source of vulnerability. The widening was due in large part to a seasonal rise in gold imports amid Diwali celebrations and the wedding season. In any case, the trade deficit remains far smaller than during the "taper tantrum" of 2013.