By IANS,
New Delhi : India’s merchandise exports fell 12.1 percent in October to register the sharpest fall in 10 years, due largely to the global financial meltdown, raising doubts if the target of $200 billion for the current fiscal can be met.
The exports for the month were valued at $12.822 billion, against $14.588 million for October last year, latest data released by the commerce and industry ministry showed Monday. But imports rose 10.16 percent to $23.360 billion, against $21.126 billion.
“October has historically been an important month for Christmas-related export shipments,” said global consultancy Goldman Sachs in its Asia Economics Data Flash released, soon after the trade data was made available.
“This year, however, October exports were weak due to both drying external demand as well as difficulty in obtaining/rolling-over trade credit,” it said.
Issuing a similar warning, ratings agency Moody’s said the bottom of the global financial crisis was still far from sight, which was a huge concern to exporters across Asia who depend heavily on demand in the US and Europe.
“India’s export performance is expected to be lacklustre for the rest of this year and also much of 2009 as consumers and businesses around the world have cut back expenditure,” said Sherman Chan, an economist with Moody’s Economy.com.
“Slowing external orders will also hurt local manufacturers, which will in turn curb job creation.”
Cumulatively, exports for April-October amounted to $107.796 billion, which was 23.7 percent higher than the $87.144 billion logged during the corresponding period of the previous fiscal.
Similarly, the cumulative value of imports for the first seven months $180.789 billion, as against $132.780 million in the like period of last fiscal, showing a growth of 36.2 percent.
This resulted in the country’s trade deficit for April-October jumping to $72.993 billion from $45.636 billion for the like seven months of last fiscal.
India had its eyes set on $200 billion in merchandise exports for this fiscal, after missing the target of $160 billion for the previous fiscal, with an actual figure of $155 billion.
Moody’s said any government assistance to struggling exporters was only a “band-aid” solution, as the root problem was recession in most parts of the advanced world that had made consumption sluggish.
“India is decelerating on all engines. There is not much the authorities can do to boost growth,” Chan said, adding the loosening of monetary policy has led to the rupee ruling at over 20 percent lower than its value at the year’s start.
“Exports are not expected to stage a solid rebound until market confidence recovers.”