New Delhi: India’s exports declined for a 10th straight month in July as the global recession eroded demand in the nation’s biggest overseas markets in the US and Europe.
Merchandise shipments dropped 28.4% from a year earlier to $13.6 billion (Rs66,232 crore) after sliding 27.7% in June, the government said in New Delhi on Tuesday. Exports plunged 33.26% in March, the biggest fall on record, according to ‘Bloomberg’ data going back to April 1995.
India last week extended tax refunds to exporters and announced incentives to explore new markets in Africa and Latin America. Commerce minister Anand Sharma last month signed free-trade accords with South Korea and the 10-member Association of Southeast Asian Nations as India tries to reduce dependence on the US and Europe, which account for 40% of the country’s exports.
Hopeful: Commerce minister Anand Sharma says India may return to an annual average export growth of 25% in three years to 2014. Kamal Kishore / PTI
The government’s efforts are aimed at arresting the exports decline and protect employment, said Rohini Malkani, an economist at Citigroup Inc. Shipments are likely to decline by 10% to $158 billion in the current fiscal to March, Malkani estimates.
The global recession hit Asia hard as the region is almost twice as reliant on exports as the rest of the world. South Korea’s exports fell 20.6% in July, the 10th consecutive monthly decline, a report showed on Tuesday. Japan’s exports tumbled 36.5%.
The continued risk of sluggish demand prompted the World Trade Organization to lower its forecast for trade in goods for 2009 in July. The trade arbiter now expects a drop of 10% after forecasting a 9% contraction in March.
India has been hit by the global slump as it becomes integrated into the world economy. The volume of trade rose to around 35% of gross domestic product in the year ended 31 March from 21% in 1997-98, the year of the Asian financial crisis, according to the central bank.
Flagging exports are forcing jewellers, textiles and leather makers to scale back production and cut jobs.
Exporters cut about 500,000 jobs in 10 industries, Sharma had said on 8 July. Sharma, while unveiling the foreign trade policy for five years to 2014, last week said he expects the nation to export goods worth $168 billion in the fiscal year to March and $200 billion in the following year. India may return to an annual average export growth of 25% in the three years to 2014 as global demand picks up, he predicts.
Imports fell 37.1% in July from a year earlier to $19.6 billion, according to Tuesday’s report. Oil imports declined 55.5% to $5.6 billion and non-oil imports fell 24.5% to $13.9 billion, the government said in a statement.
India’s exports in the first four months of the fiscal to 31 July slumped 34.1% to $49.6 billion, while imports slid 32.5% to $78.5 billion, Tuesday’s report showed.