Exports fall in February, may miss annual target

By Manoj Kumar

NEW DELHI (Reuters) - Merchandise exports fell for the first time in eight months in February, signalling the country may miss its annual overseas sales target for the second straight year, data released on Tuesday showed.

Several months of rising exports have helped India bring down its current account deficit to a manageable level, and despite the weaker data in February, it is likely to beat last fiscal year's total of $300 billion in merchandise exports.

In the first 11 months of the 2013/14 fiscal year that ends on March 31, India's exports were $282.8 billion, up 4.79 percent from the same period a year ago, data released on the trade ministry website showed. But it is unlikely to export enough in March to reach the trade ministry's $325 billion target

"The momentum of export growth has been lost when we were about to reach the final goal-post," said Anupam Shah, chairman of the Engineering Exporters' body, EEPC India. "At this rate, there is no way we can achieve the target of $325 billion in the current fiscal year."

In February, merchandise exports fell 3.67 percent from a year earlier to $25.69 billion, compared with 3.8 percent growth in January.

Analysts say exports, which contribute nearly 16 percent to the gross domestic product, have slowed in part because of a stronger rupee.

The trade deficit, however, continued to fall in February, driven by a decline in the oil import bill and curbs on gold, the country's second-most expensive overseas purchase after oil. Overall imports fell 17.09 percent year-on-year to $33.82 billion, the data showed.

Falling imports will further ease pressure on the country's current account balance.

The current account deficit narrowed to $4.2 billion, or 0.9 percent of gross domestic product in December quarter, from 6.5 percent, or $31.9 billion, a year earlier.

The trade deficit for the first 11 months of the fiscal year declined by more than $51 billion from a year ago to $128 billion.

(Editing by Richard Borsuk)