India's trade deficit eased to $10.32 billion in March from $13.54 billion recorded a year ago, much below the analysts’ expectation of a $13.50 billion deficit, as exports rose for the third straight month, data released by the Ministry of Commerce on Thursday stated. The trade deficit for the 2013 fiscal year stood at $19.1 billion up from $18.3 billion recorded, a year ago.

Surge in exports as well as fall in imports are expected to bring relief to the record current account deficit, which is expected to have hit about 5 percent of the GDP in the fiscal year ended March 31, 2013, for Asia’s third largest economy.

Exports rose by 6.97 percent annually to $30.84 billion in March, while imports for the month declined 2.87 percent to $41.16 billion aided by a sharp fall in fuel prices, Trade Minister Anand Sharma said.

The exports for the full year ended March 2013 stood at $300 billion, lower by 1.7 percent from $306 billion recorded in the previous fiscal year.

The value of imports for the full year ended March 2013 totaled $406.9 billion, a marginal increase of 0.01 percent in comparison to a total import of $406.8 billion in the year ago period.

Sharma who announced the data at a meeting of exporters said the government is taking steps to improve the exports to reign in the high current account deficit. He also announced a slew of incentives including a 2 percent subsidy for the textile sector to boost the exports.

"We are conscious of the need to enhance exports so that we can address the real challenge of bringing down the trade account deficit, which directly impacts the current account deficit," Sharma said, according to the Reuters report.

The contraction in annual exports was registered for the first time since 2010 fiscal year, and reflected the global economic slowdown as orders from the U.S. and the euro zone countries declined.

Oil Trade

Oil imports in March stood at $13.3 billion, 16.6 percent lesser in comparison to $16 billion recorded in the corresponding period last year. Non-oil imports in March rose 5.71 percent to $29.7 billion, in comparison to $28.1 billion registered in the same period last year.

However, oil imports for the full year ended March, stood at $169.2 billion indicating that India which depends on imports to meet most of its energy needs has spent 9.22 percent more on imports than the previous year, while non-oil imports for the same period totaled $322.2 billion, 3.62 percent lower than the previous year.

India