* Trade secretary says tough time ahead for exports
* Says sees full-year trade deficit at $160 bln
* Jan exports up 10 pct; imports rise 20 pct
* Jan trade deficit at $14.7 bln
(Adds details, quotes)
By Matthias Williams and Manoj Kumar
NEW DELHI, Feb 9 India's current account
deficit is on track to reach 3.5 percent of GDP in the fiscal
year ending in March, its worst in at least eight years, because
of a widening trade shortfall, a top government official said on
Exports are struggling to maintain the growth rate seen
between April and September, because of sluggish demand from the
United States and Europe and outlook remains difficult.
"There is still a shroud of uncertainty as to whether Europe
is out of the woods yet or not," Trade Secretary Rahul Khullar
"Fiscal year 2012/13 is going to be tough," he said, but
ruled out any fiscal stimulus to support the exporters, citing
the government's strained finances.
The deterioration in the current account deficit could pile
pressure on the rupee, which fell nearly 16 percent against the
U.S. dollar in 2011 before recovering strongly this year, making
it more reliant on volatile capital flows to fund the gap.
The current account deficit was 2.6 percent of gross
domestic product in the previous fiscal year.
Merchandise exports, which contribute about a fifth to
India's economy, provisionally grew an annual 10.1 percent to
$25.4 billion in January.
New Delhi is on track to achieve its 2011/12 export target
of $300 billion having already reached nearly 81 percent,
compared with $246 billion in the previous year.
Imports continue to outpace exports. The January import bill
rose 20.3 percent on year to $40.1 billion, resulting in a trade
deficit of $14.7 billion for the month.
Khullar, who will take over as India's new EU ambassador
shortly, projected the full-year trade gap to touch $160
billion, higher than his earlier estimate of about $150 billion.
The shortfall last year was $104 billion.
A 7 percent appreciation in the rupee's value against the
U.S. dollar since the end of December should help bring down the
import bill and help lower the trade gap in the next two months,
The rupee has rebounded on the back of strong capital
inflows and measures taken by the central bank to stabilize the
Foreign institutional investors have moved $6.6 billion into
Indian shares and debt since the end of 2011, data from the
Securities and Exchange Board of India showed.
(Writing by Rajesh Kumar Singh; Editing by Ranjit Gangadharan)