According to senior government officials, the country's current account deficit might increase to the level of 3.5% of GDP in the fiscal year.

The level is the worst in eight years as exports from the country are struggling to maintain growth due to continuing global economic uncertainties. The exports grew in April to September period but exporters are finding it difficult to maintain growth due to low demand.

Trade Secretary Rahul Khullar said that there is uncertainty over recovery in Europe and the coming year is expected to be difficult for the companies. He pointed out that there might not be any fiscal stimulus for exporters due to the financial crunch being faced by the central government.

The widening of the current account deficit might put more pressure on the India rupee, which has become the worst performing currency in Asia in 2011. The current account deficit was estimated at 2.6% of the GDP in the previous year.

The country is on target to achieve the target of $300 billion in exports in the year. According to official data, exports from India in the previous year were $246 billion. On the other hand, imports to India continued to out grow exports. The country's trade deficit in the month of January was recorded at $14.7 billion.