New Delhi, Sept. 15: Export growth slipped to a five-month low of 2.35 per cent in August at $26.95 billion, throwing a serious challenge to the Narendra Modi-government, which will soon announce its maiden trade policy.

The government has pledged to look not just at sops in the forthcoming plan but will concentrate on raising the country’s share in the world trade.

Analysts say that to achieve a share of 4 per cent in world trade by the end of the decade, the country’s exports must grow 30 per cent annually — by contrast exports have grown at a niggardly pace in August.

Only late last week, the government had said industry growth in July was 0.5 per cent, throwing doubts on claims of a rebound in the economy, with Modi coming to power.

A fall in global oil prices, however, put a lid on import growth, which was just 2 per cent at around $38 billion in August, bringing the trade deficit down to a four-month low $10.83 billion.

Trade deficit in May and June stood at $11.23 billion and $11.76 billion, respectively, while it was $12.22 billion in July. In April, it stood at $10.08 billion.

Meanwhile, gold imports have surged 175.53 per cent to $2.03 billion from $738.7 million in August last year, which rule out a duty cut anytime soon.

“We can manage with monthly gold imports of about $2 billion and the jump in the August number is largely due to last year’s low base after a sudden clampdown. The jump may look alarming but there is no reason for panic,” Yes Bank economist Shubhada Rao said.

Last week, commerce minister Nirmala Sitharaman had said, “The current account deficit has come down. But immediately, there is no plan to reduce import duty on gold.”

The finance ministry is likely to continue with the import levy as the upcoming festive season traditionally leads to a surge in the demand for the yellow metal.

The trade and current account deficits have narrowed sharply since the government raised the duty on gold imports to 10 per cent from 2 per cent through a series of steps last year.