New Delhi: Indian exporters expect to cut about 10 million jobs by March as the global recession prompts overseas buyers to cancel orders.
The year 2009 is going to be the worst year in the history, A. Sakthivel, president of the Federation of Indian Export Organisations (FIEO), told reporters in New Delhi. Exporters don’t have orders beyond January and if the present trend continues, there will be approximately 10 million job losses. Indian exporters currently employ about 150 million people.
Worst year: FIEO president A. Sakthivel says fresh orders are drying up. PTI
India’s exports fell for a second month in November and industrial output contracted for the first time in at least 13 years in the previous month. That’s weakening an economy expected by policymakers to grow at the slowest pace in six years in the 12 months to March.
India will miss its target of $200 billion (Rs9.75 trillion today) in exports in the 2009 fiscal year amid weaker demand, Sakthivel said on Tuesday.
Fresh orders are drying up due to lower demand and buyers are cancelling earlier orders or rescheduling the shipments, he said.
Overseas shipments dropped 9.9% to $11.5 billion in November from a year earlier after contracting 12.1% in October, the first decline in seven years. Output at factories and utilities also shrank in December, according to a survey done by ABN Amro Bank NV.
The slowdown phase will continue for some months, said N. R. Bhanumurthy, an economist at the Institute for Economic Growth in New Delhi. Recent monetary and fiscal policies might ensure that industry does not enter a recessionary phase.
To spur slowing growth, the government had on 2 January unveiled a second stimulus package in a month to inject capital into banks and allow overseas investors to double purchases of debt.
On the same day, the Reserve Bank of India cut interest rates for the fourth time in less than three months.