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India battered by downturn as exports shrink 33% in April
By Erika Kinetz |
June 2, 2009, Tuesday
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Print Edition
Print Edition
INDIA'S exports fell by a third in April, the biggest drop since 1991 and the seventh-straight month of declines, as overseas demand withered.
Merchandise exports during April were valued at 537.8 billion rupees (US$10.7 billion), down 33.2 percent in dollar terms from 643.4 billion rupees a year ago, according to government figures released yesterday.
Imports also plunged, shrinking 36.6 percent in dollar terms to 788.32 billion rupees from 993.5 billion rupees a year ago.
The falling cost of oil imports drove that decline in dollar terms, with oil imports for the month 58.5 percent lower, at US$3.6 billion. India imports about three-quarters of its oil.
As a result, the trade deficit in April shrank to US$5 billion, from US$8.7 billion a year earlier.
Merchandise exports account for about 15 percent of India's GDP, far less than China but still a significant driver for Asia's third-biggest economy.
"The April foreign trade data serve as a painful reminder that the global turmoil is likely still hurting the Indian economy," said Sherman Chan, an economist at Moody's Economy.com. She said she hasn't seen export data this bad since at least 1991.
India is struggling to create enough jobs for the 63 million Indians - a number greater than the population of France - expected to enter the workforce over the next five years.
Jyotiraditya Scindia, India's new Minister of State for Commerce and Industry, told reporters yesterday that the government would take steps to arrest the slide in exports, pushing to conclude free trade agreements with Southeast Asia and South Korea and unveiling a new trade policy in August, the Press Trust of India reported.
For now, as in many parts of the world, government spending has become an increasingly important driver of growth in India.
In the second half of the fiscal year ended March, government consumption grew 39 percent from a year earlier, much faster than economic growth of 5.8 percent and private consumption growth of 2.5 percent, Goldman Sachs said yesterday.
Merchandise exports during April were valued at 537.8 billion rupees (US$10.7 billion), down 33.2 percent in dollar terms from 643.4 billion rupees a year ago, according to government figures released yesterday.
Imports also plunged, shrinking 36.6 percent in dollar terms to 788.32 billion rupees from 993.5 billion rupees a year ago.
The falling cost of oil imports drove that decline in dollar terms, with oil imports for the month 58.5 percent lower, at US$3.6 billion. India imports about three-quarters of its oil.
As a result, the trade deficit in April shrank to US$5 billion, from US$8.7 billion a year earlier.
Merchandise exports account for about 15 percent of India's GDP, far less than China but still a significant driver for Asia's third-biggest economy.
"The April foreign trade data serve as a painful reminder that the global turmoil is likely still hurting the Indian economy," said Sherman Chan, an economist at Moody's Economy.com. She said she hasn't seen export data this bad since at least 1991.
India is struggling to create enough jobs for the 63 million Indians - a number greater than the population of France - expected to enter the workforce over the next five years.
Jyotiraditya Scindia, India's new Minister of State for Commerce and Industry, told reporters yesterday that the government would take steps to arrest the slide in exports, pushing to conclude free trade agreements with Southeast Asia and South Korea and unveiling a new trade policy in August, the Press Trust of India reported.
For now, as in many parts of the world, government spending has become an increasingly important driver of growth in India.
In the second half of the fiscal year ended March, government consumption grew 39 percent from a year earlier, much faster than economic growth of 5.8 percent and private consumption growth of 2.5 percent, Goldman Sachs said yesterday.
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