A recovery in Indian exports gathered steam in March with a pick-up in demand for engineering and petroleum products, bolstering an economy still recovering from the government's cash clampdown. However, a surge in gold and crude oil imports widened the monthly trade deficit to a four-month high of $10.44 billion, data released by the government showed on Thursday.

Merchandise exports grew 28 percent to $29.23 billion in March year-on-year, while imports rose 45.25 percent to $39.67 billion over the same period. The export numbers bode well for India's $2-trillion economy that is still smarting from Prime Minister Narendra Modi's decision in November to ban high-value currency notes.

They will also cheer Modi who aims to lift India's share in global trade to 5 percent by 2020. Indian goods exports currently account for just 1.6 percent of global trade, compared with nearly 14 percent for China. Higher volumes and prices doubled petroleum imports to $9.7 billion in March from a year ago. Gold imports surged by more than four times to $4.2 billion last month on restocking as well as demand from the marriage and festive season. The trade deficit for the year ending in March declined to $105.72 billion from $118.7 billion in the previous year, the data showed.

Copyright Reuters, 2017