New Delhi, Sept. 1 Hopes for a turnaround on the foreign trade front were belied as the country’s exports at $13.62 billion in July were 28.4 per cent lower than the $19-billion in July 2008. Plunging month after month since October 2008, exports had been down 27.7 per cent in June.
Cumulatively too exports during the first four months of the current fiscal at $49.65 billion were down 34.1 per cent from $75.3 billion in April-July 2008.
The persistent export contraction confirms that the country’s principal western markets still remain mired in the economic downturn.
New markets
The latest trade data come on the heels of the Foreign Trade Policy (FTP) announced by the Union Commerce and Industry Minister, Mr Anand Sharma, last week to boost the country’s trade by exploring new markets in Africa, Latin America, Oceania and the Caribbean in a bid to wean itself away from the financially hard-pressed developed nations that buy more than 60 per cent of India’s exports.
Against last year’s actual achievement of $168 billion, the FTP aims to touch $200 billion by March 2011 — a target that was set for 2008-09 but which had to be scaled down due to the global recession. Considering the continuous decline in exports, trade policy analysts doubt if even last year’s level would be sustained; some see a contraction of close to 10 per cent for 2009-10.
Imports too dip
Imports too nosedived sharply in July by 37.1 per cent on a year-ago basis at $19.6 billion against $31.2 billion, while cumulatively the import decline during the period under review was 32.5 per cent at $78.6 billion against $116.4 billion during April-July 2008.
The lower import figure reflects softer crude oil prices due to the slide in global prices. Oil imports in April-July at $21.9 billion were 48 per cent lower than the $42.2-billion in the corresponding months of 2008.
A double whammy on the import front was a sharp drop in non-oil imports during the first four months of the current fiscal by 24 per cent at $56.6 billion against $74.2 billion in April-July 2008. This is suggestive of a sluggish domestic economy.
According to Moody’s economy.com, the drought-like situation could lead to a fall in agricultural output and reduce the volumes available for export.
On the other hand, India may have to cut back on import of other essential industrial inputs used in infrastructure development, if importing food items takes precedence, it cautioned.
As a result of the steep decline in both exports and imports, the country’s trade deficit has narrowed from $41 billion during April-July 2008 to $28.9 billion during the corresponding current year period.
Source : Business Line