New Delhi, Mar 01: Indian merchandise exports rose 8.74 per cent in January to USD 5.11 billion from USD 4.7 billion as manufacturers rushed to meet increased demand from the key US, European Union and Japanese markets. But the trade deficit also rose on the back of an increase in imports as factories pumped out more goods to meet rising domestic demand fuelled by a rise in incomes after a bumper crop. Data released by the Commerce and Industry Ministry on Monday showed the deficit in January widened to USD 1.46 billion from USD 0.86 billion a year earlier, continuing its recent trend. In December, the deficit rose sharply on surging imports as Asia's third largest economy gathered pace. The deficit also surged in April-January to USD 14.43 billion from USD 7.56 billion in the same period a year earlier. India's economy, one of the fastest growing in the world, is set to double growth at 8.1 per cent in the year to March, 2004, from 4.0 per cent in the previous year driven by the best monsoon in a decade. Exports make up 10 per cent of India's gross domestic product and are key to helping the economy grow annually at a targeted 8.0 per cent until 2007 to cut rampant poverty levels. Nearly 260 million of India's billion plus population are poor and do not even get two square meals a day. Reflecting strong industrial activity, non-oil imports surged 28 per cent between April and January to USD 45.28 billion from USD 35.30 billion a year earlier. Oil imports rose 16 per cent to USD 16.64 billion from USD 14.35 billion. Between April and January, exports rose nearly 13 per cent to USD 47.5 billion from USD 42.1 billion. India is targeting 12 per cent export growth in 2003/04, which analysts say is achievable as global demand for Indian goods remains firm despite a strong rupee. The rupee has gained nearly 0.8 per cent since January. It rose a record 5.24 per cent against the dollar in 2003 on a flood of foreign investments into a rapidly expanding economy and increased trade receipts. Bureau Report