The trade deficit for the first seven months of the year stood at USD 77.7 billion, which though the lowest in the last 5 years is also associated with a sharp decline in growth in both exports and imports, stated research agency firm CARE.

The value of exports at USD 154 billion was the lowest in this time period declining by 17.7% this year. Imports too have been impacted with the decline being sharp at 15.3% in FY16 so far. Growth in both exports and imports has been negative since January 2015.

While the rupee has depreciated, it is lower than that witnessed in other countries. Hence, the price advantage from a weaker rupee appears to be relatively moderated, it said.

''Growth in imports of engineering goods does indicate that there is a positive scenario for capital goods as domestic production has also been growing in the first six months of the year,'' CARE opined.

Gold imports continue to be important and have shown positive growth this year.

''Exports continue to remain downbeat with negative growth mainly due to low demand conditions. Our major importing countries are generally not expected to grow at a higher rate in 2015 and hence prospects for the rest of the year would be subdued,'' CARE said.