Narendra Modi.

New Delhi - India's exports jumped to a six-month high in May, data showed Wednesday, in an encouraging sign for new Indian Prime Minister Narendra Modi who has pledged to reform and revive the struggling economy.

Exports lept 12.40 percent from a year earlier to $28 billion in May, thanks to increased demand from Western countries and a weaker rupee which made the nation's goods more competitive.

Imports were down 11.41 percent to $39.23 billion helped by a 72 percent fall in overseas gold purchases, the commerce ministry data showed.

India, the world's largest buyer of gold, has made strenuous efforts to constrain imports of bullion to lower its current account deficit - the widest measure of trade - that hit a record high last financial year.

The trade gap widened to $11.23 billion in May from $10.09 billion the previous month, but it was lower than the $19.37 billion recorded a year earlier, Wednesday's data showed.

Commerce Secretary Rajeev Kher described the figures as an “encouraging sign” as the new government looks to strengthen trade ties including with the United States to boost the sluggish economy.

Kher said it could lift the hefty 10 percent import duty slapped on gold last year as part of measures aimed at heading off a balance of payments crisis.

The high deficit fanned worries about a balance of payments crunch and put pressure on the rupee which sank to a record low before retracing its losses.

Despite the stronger exports, analysts cautioned that conditions were still fragile, with stubbornly high inflation and a second straight year of sub-five percent economic growth.

“The government has its job cut out,” said Arun Singh, senior economist at Dun & Bradstreet.

“They need to rush through reforms on taxation, improve ease of doing business and implement infrastructure projects so as to boost export competitiveness,” he said.

Growth has crumbled from nearly double-digit rates just three years ago - a level that analysts say India must reach to generate jobs for its vast young population. - Sapa-AFP