Washington (PTI): Imports from India to the US in February dropped to their lowest in the last 14 months to $1.58 billion as demand for Indian merchandise fell, hit by the worst recession in several decades.
The fall in imports from India is in line with the trend of overall decline in the US imports leading to the US total trade deficit dropping to a nine-year low of $25.97 billion in February 2009.
Consequent to slower imports, US trade deficit with India fell to $535 million in February 2009. However, the lowest trade gap was in July 2008 when it touched $83 million.
But is the US happy over decline in its imports?
"Shrinking trade deficits are usually good news, but these numbers reflect the ongoing contraction in world trade overall," US Trade Representative Ron Kirk said in a statement.
Imports from India or conversely Indian exports to the US remained over $2 billion a month for nine months of the 14 months since January 2008.
Showing a slump in demand, the shipments from India declined consistently from November 2008 and touched a low of $1.58 billion in February 2009.
Recession in the US has led to shuffling of its import basket from India with the share of gems and jewellery, carpets and apparels dropping while pharmaceuticals and iron and steel strengthening presence in the American market in 2008.
On a decrease in the US's total imports from India, gems and jewellery saw its contribution dip from 25.73 per cent in 2007 to 21.7 per cent in 2008 while carpets' share fell to 2.20 per cent last year from 2.56 per cent in the previous year and apparels to 7 per cent in 2008 from 7.9 per cent in 2007, according to the US commerce department estimates.
However, export of Indian pharmaceutical products in the US increased to $1.48 billion (a 5.7 per cent share) last year from $895.97 million (3.72 per cent) in 2007. Exports of iron and steel items was up from 5.11 per cent in 2007 to 6.5 per cent in 2008.
India exported $924.057 million worth iron and steel products last year, against $449.85 million earlier, the data stated.
America's total imports from India stood at $25.76 billion in 2008 against $24.073 billion in 2007, according to the data.
Source : The Hindu