Exports declined 29% in June: Govt

Value of merchandise exports is expected to contract for the ninth consecutive month in June as major destinations for Indian goods like the US and Europe continue to reel under economic slowdown.

Replying to a supplementary question in the Rajya Sabha today, Commerce Minister Anand Sharma said overseas sale of Indian goods declined 29 per cent in June, almost the same rate seen in the previous month. “The economic crisis has had adverse impact on our exports that have been declining since October 2008,” Sharma told the upper house of Parliament.

The final export figure during June is expected to be released by the commerce ministry on August 1. Going by Sharma’s statement, exports during June 2009 are likely to be about $ 11.73 billion over $ 16.52 billion in the year ago month, when overseas sale of Indian goods had expanded 39.19 per cent.

“The increase in exports will depend on revival in major economies,” Sharma added.

Significantly, imports into the country have been in the negative territory for six months ending May 2009, pointing towards weak demand in the domestic economy. To boost wilting exports, Finance Minister Pranab Mukherjee has doled out several relief measures for exporters. These include continuation of interest subsidy on export related loans and enhanced guarantee on consignments meant for exports till March 2010.

Moreover, the market development assistance allocations have also been enhanced by 148 per cent to Rs 124 crore in 2009-10 from Rs 50 crore in 2008-09.

Other measures in the Budget that will benefit exporters include extension of tax benefits for Export Oriented Units and software Technology parks of India till March 31, 2011 as well as scraping of Fringe Benefit Tax.

“We will continue to support exporters through more measures in the Foreign Trade Policy, which will be announced in August this year,” Sharma had recently said in a media interaction.

Sharma expects exports growth to remain flat in 2009-10 as demand in overseas markets will continue to be weak.

“We should remember that while world trade is expected to shrink by 9 to 11 per cent in 2009, we would be much better of with a flat growth rate compared to other countries,” he said during the media interaction.