JOIN USFalling exports hampering India's growth, finds study
Exports have shown a declining trend since October 2008, accompanied by downturn in import mainly due to lower oil import bill. Trade balance deficit, as a result narrowed to US$ 25.98 billion during first quarter of fiscal year 2010 compared to US$ 314 billion during first quarter of fiscal year 2009. Despite of net invisibles surplus of US$ 20.2 billion, India’s current account deficit stood at US$ 5.8-billion for first quarter of fiscal year 2010, the report said.
Sluggish global demand
India’s export continued to taper for the eleventh consecutive month. However, there has been some arrest in the contraction. The year-on-year contraction in the export for August 2009 was reported at 19.4 per cent, (US$14.28 billion), lower than 28.4 per cent in July. The contraction is mainly attributed to continued sluggishness in global demand accompanied by lower commodity prices compared to the same time last year when the prices were at their peak.
Apart from placing pressure on the country’s Balance of Payment (BoP) position, the shrinking exports have also substantially reduced the employment opportunities in labour-intensive segments like textiles, gems and jewellery, marine products and handicrafts.
India’s imports too dropped by 32.4 per cent valued at US$ 22.66-billion, mainly led by lower oil-import bill and moderated domestic demand scenario as a consequence of the global recession. Additionally, NRI deposits which have remained quite strong during the period of crisis reported a net inflow of around US$2 billion.