Exports Lead India Growth Revival

The lower trade deficit has helped curb the current account deficit that had spiralled to a record high of $88.2 billion or 4.8 percent of the country's GDP in the financial year ended March 2013.

The current account deficit dropped to $5.2 billion or 1.2 percent of GDP in the July-September quarter of the current year, 75 percent lower From $21 billion or five percent of GDP, recorded in the corresponding quarter of last year.

Soumya Kanti Ghosh, chief economic adviser at the State Bank of India, said India's current account deficit is expected to come down to $40 billion or 2.2 percent of the GDP in the financial year 2013-14.

"The momentum in export growth is an encouraging sign, and we believe that this trend will be maintained, going forward, partly aided by a lower base and seasonal impact in the last quarter," Ghosh said.

Anupam Shah, head of the Engineering Export Promotion Council (EEPC), Said while the fall in trade deficit is a good development for the Indian economy, it is largely a result of a steep import compression rather than a smart rise in exports. Going forward, he said, the focus should be on boosting exports, instead of putting a curb on imports.

"We must reverse this trend and focus more on export growth than import compression. The India story should be led by export drive, and not reduced consumption at home," the engineering export body chief said.

Imports have come down largely due to a series of steps taken by the government to lower gold and oil demands.

Read More:

SEBI To Overhaul Corporate Governance Code For Listed Cos

5 Most Popular Brands That Disappeared Over Time