International trade is the worst victim of the present financial crisis, which has led to one of the most severe global recessions post World-War II. According to IMF projection, global trade is likely to decline 11% in volume terms in 2009.
The trend has huge social implication. According to World Bank estimates, 53 million more people will fall into the poverty net in 2009 and over a billion will go chronically hungry. The intense recessionary trend is being witnessed in developed countries like the US, Japan, UK and other west European countries, which are India's large trading partners. Due to this, consumption demand from these countries has taken a hit, adversely affecting India's export.
In the 11 months since September 2008, exports from India have declined month after month. In fact, 2009 saw a whopping 33% decline. However, the government has hoped that in 2009-10, total exports, which constitute almost 17% of India's GDP, would not be negative. However, experts feel this is a tall claim and exports might witness some decline in the current financial year before growing in 2010-11.
Though the government has taken a number of measures to revive the export sector, the result so far has not been encouraging. In fact, a senior government official said that as there is complete lack of demand from traditional markets, nothing much could be done. Referring to an exporter's advice that the government should provide incentives to importing agencies abroad to buy Indian products, the official said such measures are not sustainable in the long run. He said that unless the developed economies started looking up, there is nothing much that can be done.
Source : TOI