India's trade deficit narrowed in January, helped by a 77% drop in imports of gold and silver while exports ticked up, improving the outlook for the country's fragile current account balance.
The trade ministry said it had recommended easing curbs on gold imports, prompted by the brighter trade picture.
The trade deficit stood at $9.92 billion last month compared with $10.14 billion in December, a trade ministry official said on Tuesday.
Merchandise exports rose 3.79% year-on-year to $26.75 billion, compared with a 3.5% annual growth in December.
Imports fell 18.07% year-on-year to $36.57 billion led by a 77% drop in gold and silver imports on the year.
India expects to keep the current account deficit down under $50 billion in the fiscal year to March 2014. The shortfall was a record $87.8 billion in the previous 12-month period which had precipitated a record fall in the value of the rupee against the dollar last summer.
Among the export laggards were gems and jewellery, which fell by 7.5% in April-January, while iron ore exports were down by 1%.
On the export target of $325 billion for the year, recently-appointed commerce secretary Rajeev Kher said it was "achievable". have achieved almost $260 billion, in that realm we need to have $60
(bln) more, in the vicinity of $60 (bln). It's a tough call but of course, it is achievable because my understanding is that many of the figures March shows a reasonably good incline. One should hope that these figures will improve," he said.
Oil imports in January were lower by 10.1% on year at $13.19 billion. This is the sharpest fall recorded since March 2013. For the year so far, oil imports were up 1.2% at $136.50 billion.
Gold and silver imports in January were $1.72 billion, down sharply by 77% on year. In April-January, gold and silver imports fell by 37.8% to $29.0 billion.