The Economic Times
India’s exports tumbled 15.9 percent in January — its fourth straight monthly fall — and the acceleration in the pace of its decline amid a deepening recession in key markets such as the US, Europe and Japan has put into doubt prospects of a near-term revival.
Economists expect the downward trend to continue for the remainder of the current fiscal year to end-March and even spill over into the next fiscal. “The export figures for February are expected to be on the same line as the January figures. There is a contraction in world demand and it is obvious that exports will get affected,” a senior government official said.
Merchandise exports fell to $12.38 billion in January against $14.72 billion in the same month a year ago. The hardest-hit sectors include handicrafts, carpets, cotton yarn & fabrics, gems & jewellery, computer software, coal and minerals, oil meals and rice.
Providing further proof that the Indian economy was slowing down, imports also moved into negative territory for the first time this fiscal year, falling 18.1 percent in January, with non-oil imports slipping by 0.5 percent. The trade data comes close on the heels of weaker third quarter economic growth figures of 5.3 percent and a 2 percent drop in industrial production.
The sharp drop in imports had a flattering effect on the trade deficit, which at $6.07 billion in January 2009 compared favourably with $7.84 billion in the same month a year ago.
A steep fall in the rupee against the dollar also ensured that January exports in rupee terms was 4.3 percent higher at Rs 60,460 crore.
“The magnitude of contraction in trade suggests that the GDP numbers could be as low as 4 percent in the fourth quarter. There is no reason to believe that the export data will be better in the coming months. The export figures are expected to stabilise around October as the global economy improves,” said Rajeev Kumar, director of economic thinktank ICRIER.
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