July 1 (Bloomberg) -- India’s exports declined for an eighth straight month in May as recessions in the U.S. and Europe damped demand for the nation’s products.
Merchandise shipments dropped 29.2 percent from a year earlier to $11 billion, after sliding 33.2 percent in April, the government said in New Delhi today. Last month’s decline was the biggest fall on record, according to Bloomberg data going back to April 1995.
Reserve Bank of India Governor Duvvuri Subbarao on June 20 said a pickup in exports is critical for the economy, which is forecast by the central bank to grow this year at the slowest pace since 2003. The government may unveil relief measures in its July 6 budget to help exporters fight shrinking profits and reduce job losses, according to Trade Minister Anand Sharma.
“India’s economic outlook still hinges on developments in the U.S.,” said Sherman Chan, an economist at Moody’s Economy.com in Sydney. “Based on our forecast that the U.S. will bottom out in October, India looks set to embark on a solid recovery only in 2010.”
India’s imports fell 39.2 percent in May to $16.2 billion, taking the trade deficit to $5.2 billion in the month, today’s report showed.
The government may extend some relief measures for exporters such as lower interest rates on loans, easy availability of credit, rollover of loans and tax refunds to help shield exporters from the impact of the global recession, Trade Minister Sharma said on June 19.
The government also plans to announce a foreign trade policy in August that will include additional support to exporters, according to Sharma.
Source : Bloomberg.com