Mumbai, April 8 -- Reserve Bank of India (RBI) Governor Sanjay Malhotra on Wednesday said India's merchandise exports contracted by 0.2 per cent in the first two months of the year, while imports recorded a sharp growth of more than 22 per cent, largely driven by higher gold imports, resulting in a widening trade deficit.

Speaking during the monetary policy announcement, the Governor highlighted that the decline in exports was due to a contraction in key global markets amid ongoing geopolitical tensions and weakening global demand.

He stated, "India's merchandise exports contracted by 0.2 per cent during the first two months of this year on a year-on-year basis. This was a result of export contraction in key markets. Merchandise imports...