Amid demand slowdown in the Western markets, India's May exports declined by 4.16 per cent to $25.68 billion.
The exports had totalled $26.7 billion in the same month last year.
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Besides, signalling a slowdown in the domestic market, the imports declined as well by 7.36 per cent to $41.9 per cent in May 2012 from $45.2 billion year-on-year, Director General of Foreign Trade Anup Pujari said.
With sharp decline in imports, the trade deficit in May has shrunk to $16.3 billion, from $18.5 billion year-on-year.
After crossing the $300 billion mark last fiscal, India is looking at an export figure of over $360 billion in 2012-13.
Exports in April were $24.4 billion. The overseas shipments in April-May of 2012-13 now total 50.13 billion, as against 50.48 in the same period last fiscal.
Cummulative imports during the first two months of this fiscal were $79.8 billion, down 2.42 per cent from $81.87 billion in the same period of 2011-12.
Earlier this month, the government had announced a slew of measures like continuation of interest subvention to boost exports because of fragile global economy and problems in the euro-zone.