Indian exports, which were hit by global slowdown last year, started this year on a double-digit growth, but gradually declined and finally entered the negative territory in May with no major turnaround since then.
The export data for the month of January was outstanding with 10 per cent growth in outbound shipments, but it soon shrink to 5 per cent in May in the backdrop of gloomy global outlook and consistently remained on lower side since then.
In order to arrest the downfall in the sector, government diversified export from the traditional markets of the US and Europe which produced positive results, but could not undermine the overall fall in merchandise shipments as these two market accounts for about one-third of India's exports.
Despite dampen export growth prospects, India's exports crossed the USD 300-billion mark and touched USD 307 billion during 2011-12. Meanwhile, the country's trade deficit also touched an all-time high of USD 185 billion.
Besides, the balance of trade gap widened to USD 175.5 billion in January-November 2012 in comparison to USD 146.9 during the same period last year.
Widening trade gap is an alarming situation for an economy as it would directly impacts current account deficit (CAD) and domestic currency. Currently, CAD of India stood at 3.9 per cent of GDP in the April-June quarter.
Adding the woes, the experts have forecasted that India's exports during the current fiscal may hang around USD 300 billion mark against the ambitious target of USD 360 billion for the current fiscal.