New Delhi: Declining for the eighth month in row, exports contracted by 1.92 percent in December 2012 to USD 24.8 billion, widening the country's trade deficit to USD 17.6 billion in the same month.
Exports in December 2011 stood at USD 25.3 billion.
The decline, however, is lower compared to November last year when the shipments had declined by 4.17 percent, raising hopes of further improvement during the last quarter of the fiscal.
Imports, on the other hand, grew by 6.26 percent to USD 42.5 billion in December, 2012.
During the April-December this fiscal, shipments have shrunk by 5.5 percent to USD 214.1 billion compared to the same period last year. The contraction is slightly lower compared to about 6 percent in the April-November period.
Commerce Secretary S R Rao said that the fall in exports have been slightly arrested and "with a new set of incentives, which we get into force from January 1, we expect that in the current quarter (January-March 2013), there will be a further improvement in the export performance".
He said the world trade has not performed well in 2012 and the year was the "worst" in terms of global trade.
"If we look at the WTO forecast for 2012, initially they forecast that the world trade will grow by 3.9 percent but that has been scaled down thrice and it ended with 2.5 percent. The 2012 rate of growth in the world trade has been less than half of past 20 year average," he said.
Reacting to fall in exports, Apparel Export Promotion Council (AEPC) Chairman A Sakthivel said the government should take some steps in the Budget to boost shipments.
Imports in the first nine months of this financial year dipped by 0.71 per cent to USD 361.2 billion. Trade deficit during the period stands at USD 147.2 billion up from USD 137.3 billion in the same period previous year.
Oil imports in December increased by 23.5 percent year-on-year to USD 14.4 billion. Non-oil imports, however, declined by 0.87 per cent to USD 28.11 billion.
During April-December 2012, oil imports grew by 12.18 percent to USD 124.5 billion. However, non-oil imports during the period dipped by 6.37 percent to USD 236.75 billion.
Rao added that for 2013 also, the WTO has estimated a growth rate of 4.5 percent which is again a scale down version of 5.2 percent projected earlier.
When asked if the government is considering hiking import duty on gold, Rao said, "we are in consultations" with the finance minsitry.
However, he said "one good news is that the US has overcome from the fiscal cliff and we hope that the US economy stablises". The US and Europe accounts for about one-third of the country's exports, which was USD 307 billion in 2011-12.
The Secretary said the strategy of market diversification has helped exporters.
"Fall in exports have been substantially cushioned because of diversification in Africa, Asean, far-east and Latin America. There is a need to redouble our efforts here," he said adding "rupee has appreciated to Rs 55 which is a good news for us".
On export target of USD 360 billion, he said it is difficult to achieve.
Exporters body FIEO expects that exports may touch USD 300 billion by end of 2012-13.
Out of the top five items that India exports only pharmaceuticals recorded a positive growth of 10.7 percent during April-December period. Engineering exports declined by 4.4 percent, petroleum products by 4.1 percent, gems and jewellery by 10.6 percent and textiles by 8.4 percent.
Similarly, out of the top five import items, only crude oil recorded growth of 12.18 percent to USD 125 billion.
Rest registered negative growth - gold and silver (-15 percent), machinery (-5 percent), electronics (- 9 percent) and pearls, semi-precious and precious stones (-36 percent). Gold and silver import stood at USD 39 billion as against USD 46 billion in April-December 2011.
Federation of Indian Export Organisations President M Rafeeque Ahmed said at the current pace "reaching last year exports of USD 307 billion seems to be ambitious".
"The decline in exports is due to global slowdown including contraction in emerging economies," he said.
Expressing concern over widening trade deficit, he said trade deficit may cross USD 200 billion in 2012-13.
"Such high deficit will put pressure on current account and will add to volatility of Indian rupee," he added.