Overseas shipments, which account for about 15 percent of the economy, rose 31.2 percent to $16.34 billion from a year earlier, after gaining 23.5 percent in June, the government said in a statement in New Delhi today. Imports increased 48.1 percent to $27.14 billion, widening the trade deficit to a record $10.8 billion.
India is pursuing trade agreements with other countries to boost sales of its goods abroad as accelerating inflation and slowing growth crimps spending by customers in the U.S., Asia's biggest overseas market. Rising exports may help companies sustain production, which has been hurt by the fastest inflation in 16 years and higher borrowing costs.
India last week completed free-trade talks with the 10- member Association of Southeast Asian Nations aimed at lowering or eliminating tariffs on products. Indian Trade Minister Kamal Nath said he expects the agreement to increase trade between India and Southeast Asia to $50 billion by 2010 from the present $38 billion.
India's average export growth in the seven months to July rose to 26 percent, almost double the average of 13.7 percent a year earlier.
Indian exports are rising as companies switch to new destinations to counter slowing demand from its biggest markets in the European Union and the U.S. They are also selling new goods such as medicines, auto parts and petroleum products.
The U.S. share of India's total exports declined to 13 percent in the 12 months to March, compared with 15 percent a year earlier, according to the latest breakdown of overseas sales from the central bank.
In the same period, shipments to Asian countries increased to 42.3 percent, compared with 39.5 percent, according to the Reserve Bank of India. India gives a more detailed analysis of exports five months after the initial data.
Growth in exports during the 12 months to March 31 this year was helped by a diversification of sales in terms of composition and destinations, the central bank said in a report last month.
Exports in the four months ended July 31 rose 24.6 percent from a year earlier to $59.2 billion, today's report showed. Imports rose 34.2 percent to $100.4 billion. That brings the trade deficit to $41.22 billion, compared with $27.35 billion in the same period a year earlier.
Trade Minister Nath has set a target to more than triple India's share of world trade to 5 percent by 2020 from the current 1.5 percent. India is targeting exports of $200 billion in the fiscal year that started April 1, 25.8 percent more than $159 billion in the previous year.
India's oil imports in July rose 69.3 percent to $9.5 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 38.7 percent to $17.66 billion.