There is an urgent need to boost exports to narrow down trade deficit and arrest ballooning current account deficit, a Reserve Bank of India (RBI) panel suggested on Monday.

The RBI panel, which had been constituted under the Chairmanship of RBI Executive Director G. Padmanabhan to recommend ways for boosting financial support from alternative sources, said that exports needed urgent support as the global trade environment was unlikely to improve in the near future.

The panel suggested, "The global trade environment may not improve in the immediate period. There is, therefore, an urgent need to boost India's exports so that the trade deficit is narrowed down, and CAD stays within the projected cap."

The panel suggested a number of measures to boost exports and arrest ballooning CAD, such as differential tax regime and expanding the scope of interest subsidies for exporters.

India's exports slipped 1.76 per cent year-on-year to $300.6 billion in financial year 2012-13; while trade deficit touched a record high of $190.91 billion during the same period.

CAD - the difference between the inflow and outflow of foreign currency - soared to an all time high of 6.7 per cent of the GDP in the October-December quarter of 2012-13. The RBI's comfort level for CAD is 2.5 per cent of GDP.