NEW DELHI: Exports rose at a modest pace for the third month running, but the sharp drop in imports led by gold helped bring the trade deficit below the $10-billion mark in January, which will further improve the current account deficit.

Exports rose 3.79% to $26.75 billion in January from a year ago, moderately ahead of the 3.5% rise recorded in December, data released on Tuesday showed.

Imports dropped at the fastest pace in four months in January, declining 18.07% to $36.6 billion because of a 77% plunge in bullion imports, helping narrow the trade deficit to $9.92 billion in January from $10.14 billion in December. “We now firmly believe that FY14 CAD (current account deficit) should go below $40 billion and would be closer to 2% of India’s GDP,” said Soumya Kanti Ghosh, chief economic adviser, State Bank of India.