New Delhi, April 17: A surge in gold and silver imports has widened the trade deficit in March to a four-month high of $11.79 billion, an increase of 72 per cent over February.

The development follows the relaxation of import restrictions on the yellow metal ahead of Akshaya Tritiya.

Exports plunged 21 per cent in March to $23.95 billion, while imports contracted 13.44 per cent to $35.74 billion.

"Continuous slowdown in demand in global markets and liquidity problem has in a major way been responsible for the double-digit negative growth in exports during the last quarter of 2014-15. A matter of more concern is that the decline was on a low base as exports declined in all the three months of the quarter," S.C. Ralhan, president of the Federation of Indian Export Organisations (Fieo), said.

However, a plunge in global crude oil prices by nearly a half since June has trimmed the import bill, making for a less worrisome trade deficit, despite the drop in exports in recent months.

Trade deficit for the full fiscal widened to $137 billion from $135.8 billion last fiscal. Exports at $310.5 billion in 2014-15 missed the annual target owing to a steep slide in March shipments.

India had set an export target of $340 billion for 2014-15.

According to economists, exports are likely to remain sluggish if demand in major markets, such as Europe, slumps further and the rupee appreciates.

EEPC India chairman Anupam Shah said, "Such a big fall of over 21 per cent in exports is quite serious and is a pointer to the problems faced by the merchandise in the global markets, which are in the middle of slowdown. With the exception of the US, rest of the world, including China and Europe is facing a squeeze. In this scenario, our cost of manufacturing coupled with transaction costs must come down while the government needs to stand by exporters."

Gold imports in March almost doubled to $4.98 billion, while silver imports rose 4.5 times to $561.4 million.

The rise in gold imports can be attributed to the recent relaxation in the 80:20 rule, under which it was mandatory for traders to export 20 per cent of the import. The Reserve Bank had also lifted the ban on the import of gold coins and medallions and stocking by traders to meet demand during Akshaya Tritiya next week.

India, the world's largest consumer of gold, imports around 800-900 tonnes of the metal annually.