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| Exports still in red, at $14.1 bn in Oct |
| BS Reporter / New Delhi Nov 12, 2009, 00:42 IST |
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Month-on-month decline arrested; figure expected to turn positive from Jan
India’s exports for October stood at $12.5 billion, down 11.4 per cent from $14.1 billion in the same month last year, on the back of weaker demand for Indian goods in the traditional markets of the US, EU and Japan.
India’s export figures were $15 billion during October 2007.
However, some very early signs of a possible upturn were visible, with month-on-month decline being arrested. Exports had declined 13.8 per cent in September. According to official statistics, merchandise exports, which were falling by over 35 per cent during April-May, had been steadily rising since June. One reason for the rate of decline being less now is because the base effect is coming into play. By October last year, exports had already started to fall on account of the global downturn.
Total exports during the April-October period stood at $90.4 billion, down 26.5 per cent from $123 billion in the corresponding period of 2008-09, data released by the Ministry of Commerce and Industry indicated.
“We expect month-on-month figures to turn positive from January, but not overall,” Commerce Secretary Rahul Khullar said, adding that the sector continues to face several problems which “will not go away by throwing more money”.
He, however, said the time was not ripe for withdrawal of sops, even though there are signs of “green shoots” in the sector. The main drivers of growth during April-October were drugs and pharmaceuticals, electronic goods, readymade garments, gems and jewellery, iron ore, cotton yarn and rice, among others.
Some sectors that continued to perform poorly, both monthly and year on year, were fruit and vegetables, handicrafts, coffee, spices and marine products which fell 47.5 per cent, 40 per cent, 35 per cent, 30.2 per cent and 26.3 per cent, respectively, year on year during April-October.
“Recovery is gradual and not robust, so stimulus should continue. The main problem is that the western markets have not revived yet. People don’t have the money there to buy imported products. So, the recovery can only be seen at wholesalers and importers levels and not at the level of consumers, which will only be clear depending on Christmas sales,” said Sabyasachi Ray, executive director, Gem and Jewellery Export Promotion Council.
Earlier this week, Finance Minister Pranab Mukherjee had said the government would continue with the stimulus measures till leading economies such as the EU, US and Japan experience strong growth, which account for 60-65 per cent of the country’s exports.
He also acknowledged the fact that since diversification cannot be done overnight, it is important to boost domestic demand.
On the other hand, Commerce and Industry Minister Anand Sharma had said the government was open to provide another booster shot after a full review of the situation was done by early next month.
During his meeting with members of a Parliamentary consultative committee today, he said the country’s merchandise exports were expected to return to high growth trajectory of over 25 per cent within the next three years.
According to A Sakthivel, president, Federation of Indian Export Organisations, the need of the hour was increase in duty drawback rates to provide competitiveness to the exporters.
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