India's exports in March fell for the first time in two and a half years as demand weakened in Europe and the U.S.

Exports fell 5.7 percent to $28.7 billion in March from the year-ago period, provisional data issued Tuesday by the Ministry of Commerce showed. Imports grew 24.2 percent to $42.6 billion, leaving a trade gap of $13.9 billion in March, compared with $3.8 billion a year ago.

The government had set an export target of $72 billion. In the first half of 2011-12, the exporters were getting good number of orders, but in the second half there was a weak demand from western markets like the U.S. and Europe, The Economic Times reported, citing an official of the Engineering Export Promotion Council, which is under the Ministry of Commerce.

U.S. and Europe together account for over 60 percent of Indian exports.

India's trade deficit surged to a record $184.9 billion in the fiscal year ended March 31 from $118.6 billion the year before, as elevated crude oil prices pushed up import bills and a faltering global recovery hurt exports. Over the past year, the rupee has lost about 16 percent against the U.S. dollar.

Oil imports were the primary reasons for a widening trade deficit, as India buys more than 80 percent of its oil from overseas. For the fiscal year, oil imports surged 46.9 percent to $155.63 billion, compared with $105.96 billion in the prior year.

The decline in exports came after ratings agency Standard & Poor's cut India's credit rating outlook to negative last week.