The Hindu : Business : Exports dip by 29 per cent in May

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Business

Exports dip by 29 per cent in May

Special Correspondent

Hit by poor demand from major markets

NEW DELHI: Exports continued to fall for the eight consecutive month with shipments dipping by 29.2 per cent in May. This raised hopes that the government would announce some relief in the budget to be presented in Parliament on July 6.

According to official data released by the Government on Wednesday, exports declined to $11.01 billion in May from $15.55 billion in the same month in the previous year.

This shows that there is no change in the declining demand for Indian goods in major markets like the U.S. and Europe which have been badly impacted by recession and poor economic growth.

Similarly, imports dropped by 39.2 per cent for the fifth consecutive month to $16.21 billion during the month, bringing the trade deficit to $5.20 billion.

Reacting to the trade data, Commerce Secretary Rahul Khullar said it was a matter of concern and there was still no sign of revival of demand for Indian goods. However, he said trade in gems and jewellery was picking up.

Oil imports plunged by 60.6 per cent to $4.13 billion in May. Non-oil imports during the month dropped by 25.4 per cent to $12.07 billion.

Exports plunged to $21.75 billion in the first two months of the current fiscal from $31.63 billion in the corresponding period in the previous year.

Imports were $31.95 billion against $51.50 billion. The trade deficit during the period under review was $10.20 billion against $19.88 billion.

Oil imports dipped to $7.76 billion ($19.24 billion) and non-oil imports to $24.19 billion ($32.26 billion) in the first two months.

Overseas shipments grew by a meagre 3.4 per cent to $168.7 billion in 2008-09 after the global slowdown began to pinch in the second half of the previous fiscal.

However, Commerce and Industry Minister Anand Sharma said the trend of decline was better than the Government’s expectation of 33 per cent fall in May and 30 per cent June.

Expressing concern over the decline, Mr. Sharma said the dip was across-the-board, particularly in the labour-intensive sectors like leather, engineering and handicrafts. “There is a fall and this trend is continuing. There will be some relief in the budget and also availability of credit on easier terms so that India’s exports can be more competitive and the second half of 2009-10 would be better for exports,” he remarked.

He said his Ministry has recommended to its Finance counterpart for interest subsidy, besides giving credit to exporters at lower rates.

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