Imports contracted 2.9 per cent to $41.16 billion, against $42.4 billion in the year-ago period. At $10.3 billion, the trade deficit in March stood at a 10-month low.
Various projections have scaled down global economic growth estimates for 2013. While the International Monetary Fund lowered its projection for global growth to 3.3 per cent from 3.5 per cent, the World Trade Organization projected global trade to grow 3.3 percent in 2013, against its previous estimate of 4.5 per cent.
In March, declining global prices cut the oil import bill 16.5 per cent to $13.3 billion, compared with $16 billion in March 2012. However, non-oil imports rose 5.41 per cent to $27.84 billion, against 26.41 billion in the year-ago period. Though the official statement did not provide the details of the import basket, it is expected the rise in non-oil imports showed an improvement in industrial activity, provided gold didn't account for a large chunk of the imports.
Ajay Sahai, director general of the Federation of Indian Export Organisations, attributed the rise in exports to the reduced reliance on Europe and higher exports to the US, Latin America and Asia. He said, Europe accounted for just 18 per cent of India's exports, against 25 per cent five years ago.
The rise in exports in March notwithstanding, for the financial year ended March, exports declined 1.7 per cent to $300.6 billion, against $306 billion in 2011-12 - the first fall since 2009-10. This was a far cry from the commerce department's initial export target of $360 billion. This means meeting the $500-billion export target (in a strategy paper) for 2013-14 would be an impossible task.
At a time when arresting the widening current account deficit, or CAD, (which comprises net trade in services and net income from investment, besides trade deficit) is increasingly challenging, this doesn't augur well for the economy. In the quarter ended December 2012, CAD stood at 6.7 per cent of gross domestic product.
In 2012-13, oil imports rose 9.22 per cent to $169.2 billion, against $155 billion in the previous financial year.
Non-oil imports fell 3.62 per cent to $322.23 billion, against $334.35 billion in 2011-12.
The pattern of oil and non-oil imports changed drastically in March. It showed industrial activity was depressed in the previous months of 2012-13. This is corroborated by data from the index of industrial production (IIP), barring the data for October, when industrial growth exceeded eight per cent. IIP data for March is yet to be released.