India missed its goods export target for 2013-14 with shipments declining for the second straight month in March 2014 as demand from key markets failed to pick up. Dip in gems and jewellery as well as electronics exports largely contributed to the fall, according to Commerce Ministry data released on Friday.

Exports in March fell 3.15 per cent to $29.5 billion while overall shipments in 2013-14 increased 3.98 per cent to $312.35 billion against the target of $325 billion.

“Sluggish demand in major markets coupled with loss of preferential access in Europe and quality issues with drugs have hurt exports,” a Commerce Ministry official told Business Line .

Trade deficit, however, was about 25 per cent lower than last fiscal as imports declined due to a sharp fall in gold and silver imports — which fell by 40.2 per cent to $33.46 billion in response to stringent restrictions — while total exports recorded only a small rise.

Trade deficit during March 2014 at $10.5 billion was marginally higher than last year as imports fell 2.11 per cent to $40.08 billion. A sharper 8.11 per cent decline in imports in April-March 2013-14 to $450.94 billion narrowed the trade deficit for the fiscal to $138.5 billion from $190.3 billion.

The narrowing trade deficit should come as a relief for the Government, which has been struggling to keep the current account deficit in check to avoid a foreign exchange crisis. “The CAD could fall below 2 per cent of GDP in Q4 for the first time since fiscal 2008,” ratings agency Crisil said.

There may be cheer on the deficit front but there is little optimism among exporters. “With the rupee so volatile, we do not know whether to hedge or not. We can suffer losses either way,” pointed out Delhi Exporters’ Association President Tilakraj Manaktala.

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