India's exports hold a promising outlook with the US economy growing at its best in four years, coupled with the rupee depreciation leading to enhanced net revenue realisations, according to a report by Assocham.
The US emerged as the top export destination for India, with USD 47.9 billion worth of shipments in the last fiscal ended March, followed by the UAE and Hong Kong, the commerce ministry data showed.
The US economic growth accelerated by 4.2% in the second quarter of this year, its fastest pace in about four years despite the ongoing tariff war with China.
"The US accounted for about a good chunk of 16% of India's total merchandise exports of USD 303 billion in the fiscal 2017-18 with the annual growth of 13.42%,” the report said.
“It is the largest market for Indian exports, both for merchandise and even services. So, when the US grows at its current pace, it augurs very well for the total Indian exports' basket,” it added. It said a sharp drop in rupee may have caused a burden on the country's import bill, but the net realisations for exporters have increased significantly.
According to the trade data for August 2018, while exports have shown a growth of about 19% in dollar terms, the rupee realisations for the export shipments went up close to 30%.
“With further streamlining of exporters' GST refunds, their competitiveness should also improve, helping them in the global market,” Assocham said. Engineering goods, chemicals, gems and jewellery are among the major items of exports to the US from India.
With the focus of the Trump administration on infrastructure build –up, the demand for Indian exports, particularly of steel and other engineering goods should increase, the report said.