India's exports contracted in the financial year which has just ended, despite a sharp decline in the value of the rupee and efforts to turn the country into a manufacturing hub, data showed Thursday.
Exports in the 2012/13 financial year fell by 1.76 percent on an annual basis to $300 billion, stretching the trade deficit to $190.91 billion.
"Despite the competitive advantage of a depreciation of our currency, our exports have not performed better," Commerce Secretary S.R. Rao lamented at a press conference called to announce the figures.
The rupee fell by 16 percent over the year, making India's exports cheaper in foreign markets, while neighbour and industrial powerhouse China saw its currency appreciate, he said.
Commerce Minister Anand Sharma regretted the decline but expressed satisfaction that it had been contained to less than 2.0 percent given the difficulties in the eurozone and other developed economies.
"If the demand is not there, then our exporters will struggle," he said.
India lagged global trends, however, with World Trade Organisation figures showing that international commerce expanded by 2.0 percent in the 2012 calendar year.
The figures serve as another warning light for the Indian economy, which is growing at its slowest pace in a decade due to high inflation and borrowing costs as well as low corporate confidence.
Annual growth is expected to be almost half the stellar levels of the previous decade at about 5.0 percent in the 2012/13 financial year, denting the re-election prospects of the Congress-led government ahead of polls next year.
Output from the industrial sector has barely grown less than 18 months after the launch of the ambitious and widely touted National Manufacturing Policy aimed at creating 100 million jobs
Sharma announced new measures on Thursday designed to help the sector, including the expansion of Special Economic Zones which are designed to help companies by offering a more business-friendly environment.
Earlier this month, the World Trade Organisation revised down its growth forecast for global commerce this year, saying expansion would be 3.3 percent instead of the previously estimated 4.5 percent.