After a robust GDP growth in FY10, the new fiscal began on a positive note with India’s export surging by 36 per cent in April to $16.9 billion
However, what could be worrying is that the trade deficit widened in April due to strong non-oil imports. The imports during the month rose by 43.3 per cent. Due to this the trade deficit increased to $10.4 billion from $7.8 billion in March.
It was the sixth consecutive month when exports have seen a rise after 13 straight months of contraction due to the financial crisis in key markets. Last April, exports had contracted by 30 per cent. But, the outlook for exports looks challenging with the threat of a double dip recession in parts of Europe.
While the Greek crisis is not a concern for the exporters, things can become difficult if the crisis spreads. European Union accounts for about 20 per cent of India’s exports.