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Indian exports up 23.5pc to $14.66 billion in June

NEW DELHI - India's export growth accelerated in June as companies shipped more gems, oil and other manufactured products to overseas markets.

Shipments, which account for about 15 per cent of the economy, rose 23.5 per cent to $14.66 billion from a year earlier, after gaining 13 per cent in May, the government said in a statement in New Delhi on Friday. Imports increased 26 per cent to $24.45 billion, widening the trade deficit to $9.78 billion.

Overseas sales are rising as companies boost shipments to Europe, Japan and other developing Asian countries to counter slowing demand from the US, India's biggest export market. Still, shipments may weaken later this year as soaring inflation and flagging growth crimps spending by customers abroad.

"Selling goods in new markets and diversifying products portfolio is helping cushion the downslide in exports," said Shubhada M. Rao, chief economist at Yes Bank Ltd. in Mumbai. A 'global slowdown' will likely hurt sales of Indian goods overseas later this year, she said.

Weaker growth in the US, Asia's biggest market, is crimping exports from the region. Japan's overseas sales fell for the first time in four years in June and shipments from China grew 17.6 per cent, slower than May's 28.1 per cent.

Talks collapse: Efforts to increase global trade suffered a setback this week after a nine-day summit at the World Trade Organisation ended in Geneva without an agreement to cut agriculture subsidies and tariffs on industrial goods. Talks collapsed on July 29 after India and the US disagreed over how poor countries could raise duties to protect their economies from surging farm imports.

"I am disappointed because we came so close to running the last mile," India's Trade Minister Kamal Nath told reporters in New Delhi on Friday. "We should continue with the engagement and I hope talks will resume soon."

The share of the US in India's total exports declined to 13.1 per cent in the 11 months to February, compared with 15 per cent a year earlier, according to the latest breakdown of overseas sales from the central bank. India gives a more detailed analysis of exports five months after the initial data.

Indian exporters are benefiting from a weaker rupee, said Sonal Varma, a Mumbai-based economist at Lehman Brothers Inc. The rupee has declined 7.3 per cent this year as crude oil advanced 27 per cent, reaching a record $147.27 per barrel on July 11. A weaker rupee adds to the value of exports, helping companies' earnings.

Trade target: Exports in the three months ended on June 30 rose 22.3 per cent from a year ago to $42.8 billion, yesterday's report showed. Imports in the quarter rose 29.7 per cent to $73.3 billion, resulting in a trade deficit of $30.4 billion, compared with $56.5 billion in the same period a year earlier.

Trade Minister Nath has set a target of more than tripling India's share of world trade to five per cent by the year 2020 from the current 1.5 per cent. India is targeting exports of $200 billion in the current fiscal year that started April 1, 28 per cent more than $155.5 billion in the previous year.

India's oil imports in June rose 53.4 per cent to $9.03 billion as refiners paid more for crude oil purchased overseas. India relies on imports of oil for three-quarters of its energy needs. Non-oil imports gained 14 per cent to $15.4 billion.