Hit by slowdown in the western markets, India's export growth dropped to 3.2% in April, but a sharp deceleration in import expansion resulted in trade deficit narrowing to $13.2 billion, the lowest in a year.
The drop in the balance of trade (BoT) should reduce pressure on the rupee which has lost value by about 15% against the US dollar since September, 2011.
Exports in April, the first month of the fiscal 2012-13 amounted to $24.5 billion, as per the provisional figures released by commerce secretary Rahul Khullar here on Thursday.
Imports for the month grew by 3.8% to $37.9, also lowest in a year. While the pace of export expansion dropped, the silver line is that there was an annual accretion in the net value, as opposed to deceleration in March when the shipments contracted by 5.7%.
For the fiscal as a whole, Khullar said, "We should be lucky to get a growth rate of 10-15%. The situation in Europe is disheartening". He said the export data shows, "there are serious demand problem and constraints (in the western markets".
Though these are early days, Khullar said: "If deceleration in imports continues, the BoT pressure will be lower than last year and if it will stay at $13 billion for the remainder period of the year, then we will end the year with $156-160 billion".