New Delhi, Mar 11 (IANS): India's exports increased by 4.25 percent to $26.26 billion in February, registering positive growth for the second straight month, on the back of revival of demands in Europe, government data showed Monday.

Exports has increased year-on-year just for the third time in the first 11 months of the current financial year. Exports had increased marginally by 0.82 percent at $25.58 billion in January, after contracting in the previous eight months in a row.

Cumulative value of exports in April-February period of 2012-13 has dropped by 4 percent at $265.95 billion, Commerce Secretary S.R. Rao told reporters here.

India's imports in February increased by 2.6 percent to $41.18 billion, leaving the monthly trade deficit of $14.9 billion.

Rao said revival in exports and low increase in imports have helped bring down the trade gap.

"The good news is that the trade deficit is coming down," the commerce secretary said.

The trade deficit had widened to $20 billion in January, the second highest ever monthly trade gap. The highest ever trade deficit of $20.9 billion in October last year.

Rao said demands for Indian goods have improved in Europe and some other parts of the world showing a sign of recovery in the global demands.

"Sectors which have large weightage especially engineering has started performing better and refined oil too. There is also a marginal improvement in textiles exports," he said.

"Positive exports data from the last two months shows that gradually economy is showing positive sign. To keep the momentum going it is important that the government keeps availability of credit to industry at lower rate," said A. Sakthivel, chairman, Apparel Export Promotion Council (AEPC).