Even as the Planning Commission on Tuesday indicated a recovery in the export sector by next year, the continued recession and economic slowdown in the U.S. and Europe continued to have a negative impact on exports which continued the downhill journey for the tenth consecutive month dipping by 28.4 per cent in July.
However, the only good news among this gloom was that in July imports too fell by 37.1 per cent, narrowing the trade deficit to $5.99 billion from $12.15 billion a year ago.
Merchandise exports were $13.62 billion during the month under review against $19.04 billion in July 2008 as demand continued to remain depressed. At its full fledged meeting chaired by Prime Minister Manmohan Singh, the Planning Commission said exports would pick up after 2010 when developed markets return to positive growth. “Exports would also recover as industrialised countries return to positive growth of one per cent in 2010 with further acceleration in 2011,” the Commission said. The government in its new Foreign Trade Policy had announced sops for trade with new markets in Latin America and Africa, which by and large remained insulated from the global crisis.
Imports fell sharply by 37.1 per cent to $19.62 in July from $31.18 billion a year ago, largely due to drop in crude oil prices.
Federation of Indian Export Organisations (FIEO) President A. Sakthivel said the declining trend was likely to continue for some more months. India has set a target of $200 billion for 2010-11.
While oil imports declined by 55.5 per cent to $5.63 billion from $12.67 in July 2008, non-oil imports were down by 24.5 per cent at $13.98 billion in July against $18.51 billion in the same period last year. During April-July 2009-10, exports contracted to $49.65 billion from $75.28 billion. Oil imports during the period dipped by 48 per cent to $21.96 billion from $42.21 billion in same period in 2008-09.
Non-oil imports in the first four months of this financial year declined by 23.7 per cent to $56.60 from $74.16 in the corresponding period last year. The trade gap during the period was $28.91 billion, down from $41.09 billion in April-July 2008-09.
Overseas shipments grew by a meagre 3.4 per cent to $168.7 billion in 2008-09.
