India's exports rose 22.5 percent to $16.64 billion in August as against a 13.2 percent growth in the previous month, helped by a revival in the demand for leather, cotton and engineering goods.
Imports jumped 32.6 percent to $29.7 billion, widening the trade deficit to $13.06 billion in the reporting month.
“Widening trade deficit is a matter of serious concern. We must boost our exports to bridge the gap,” Commerce Secretary Rahul Khullar said Wednesday.
In the first five months of this fiscal trade deficit has jumped to $56.62 billion. Khullar said total trade deficit during the current fiscal was likely to surge to $135 billion.
“The sheer size of deficit is quite high. It is manageable. But we remain concerned about the widening gap,” he added.
Total exports during the April-August period grew 28.6 percent to $85.27 billion, while imports surged 33.2 percent to $141.89 billion.
Khullar said with the current growth trend the government was confident to meet $200 billion exports target during fiscal 2010-11.
“The incentives that we announced recently will start showing its impact on exports in the coming months,” said Khullar, adding the government was still concerned about the low exports of handlooms, handicrafts and readymade garments.
In the annual supplement to the foreign trade policy last month, the government announced Rs.1,050 crore stimulus package for labour intensive export sectors like handicrafts, handlooms and leather goods, whose businesses had been badly affected by the economic downturn in the US and European countries.