India's balance of trade improved slightly in February over the last month, as exports accelerated for the second month in a row and imports moderated slightly, a trend, if continues, can take pressure off the widening current account deficit (CAD).

 Trade deficit or the gap between exports and imports narrowed to $14.92 billion in February from a high of $20.08 billion last month. The highest ever trade deficit India witnessed was in October last year when it reached close to $21 billion.

 The fall in trade gap was sharper than street expectations and may help reduce ballooning CAD, which stood at a record $22.3 billion or 5.4 per cent of gross domestic product, in the July-September quarter, primarily driven by high oil and gold imports and a sharp slowdown in exports last year.

 Exports grew to $26.26 billion in February from $25.5 billion in January. Year-on-year, exports grew 4.25 per cent and imports fell to $41.18 billion this month from a high of $45.58 billion in January.

 Economists said the decline in imports could have been primarily due to lowered import of oil and gold.  Commerce Secretary S R Rao said the deficit is lower owing to pick-up in exports, a trend which is expected to continue going further. He said, the government was taking measures to help push exports up. Rao, however, said that the conditions in the US have not changed much and demand still remains subdued.
 "We are actively involved in consultations with chambers, export promotion councils, various departments and state governments and trying to arrive at a package of incentives which would be announced shortly," Rao said.

Finance minister P Chidambaram too had assured in his post-budget interaction with the industry that his ministry was ready to extend support to the Commerce Ministry on measures it was intending to announce in the FTP.

 Reacting to the data, the Federation of Indian Export Organisations (FIEO) President Rafeeque Ahmed said that Indian exports are responding to positive global developments. “The encouraging figure of employment in US for the last month, Japan returning to growth, China's impressive export performance are better economic indicators for emerging economies,” he said.

However, the fiscal 2013 target of $360 billion exports looks tough because after 11 months  India is short of $91 billion.