New Delhi: India’s exports may have fallen by a third in April as a world-wide slump continued to hurt overseas demand for local goods, the head of exporters’ body said on Wednesday.
Job losses in the export sector may have reached 5 million in the year that ended on 31 March, said A Sakthivel, president of the Federation of Indian Export Organizations (Fieo), adding that the body will seek government relief in the forthcoming budget.
“Indian exports are estimated to be down by 33% in April mainly due to the continuing impact of global recession,” he told Reuters in an interview.
“Exports can grow by 15% this fiscal if the government provides necessary support in the budget,” he added.
Earlier this month, government data showed India’s exports declined by a third in March, its sixth straight fall, dragging down the full year’s growth to a paltry 3.4% at $168.7 billion during 2008-09.
Exports contribute close to a fifth of India’s gross domestic produce, and its contraction have impacted factory output and the overall economic growth.
Since October, the Reserve Bank of India (RBI) has aggressively lowered its lending rate by 425 basis points while government offered interest subsidies to help ease the pain of exporting firms.
But Sakthivel said Fieo would soon meet finance ministry officials and seek more incentives for exporters.
“We expect relief in income tax, more interest subsidy on bank loans and enhanced input tax credit in the budget,” he said.
On Tuesday, finance minister Pranab Mukherjee said the government was considering more relief measures for sectors like textiles, leather, gems and jewellery.
Policy makers fear worsening of economic situation in the United States and Europe may continue to slash India’s exports.
The World Bank has forecast global trade to shrink 6.1% this year as a result of the crisis while World Trade Organisation forecast a 9% contraction.