Despite the slowdown in world economies, the government expects exports to increase 20 percent in the current fiscal .Commerce Secretary S R Rao told reporters after meeting the exporters body India is still the second fastest growing economy. Last fiscal, the country crossed the merchandise shipment target of 300 billion US Dollars. 

Rao expressed relief over narrowing trade deficit and said the trade gap would be under control. Last month, exports dipped over 5 percent while imports shrunk over 15 percent, bringing down trade deficit to a 15-month low.

Director-General of Foreign Trade (DGFT) Anup Pujari said the trade deficit stood at 185 billion US Dollars last year and the government has taken steps to reduce the trade
deficit this year.

The government has lifted ban on export of skimmed milk powder, SMP, to improve finances of dairy firms and help milk producers.

Earlier this month, the government had decided to lift export ban on SMP amid surplus availability of milk.

Directorate General of Foreign Trade, DGFT, said in a notification that the classifications of export and import items has been bifurcated and export of new entry namely skimmed milk powder has been made free.

The notification, however, said, exports of milk and cream, concentrated or containing added sugar or other sweetening matter, including whole milk powder, dairy whitener and infant milk foods are still prohibited.

AIR correspondent reports, the government had banned SMP exports in February 2011 to contain rise in domestic milk prices.

The dairy industry has been facing liquidity crunch as it could not make profit through sale of skimmed milk powder due to steep fall in domestic prices following surplus supplies.

Domestic prices of SMP have declined to 150 rupees per kg now against 190-200 rupees per kg in the same period last year. Milk production in India, the world's biggest producer, is estimated at over 120 million tonnes in 2011.