Impact of deepening of economic crisis and global slowdown
In a sign of deepening of economic crisis and global slowdown impacting overseas shipments, especially to the United States and European markets, India’s exports have taken a plunge, registering a drop of 4.16 per cent at $25.68 billion in May when compared with the year-ago period.
According to the data released by the Commerce Ministry on Monday, imports dipped by a sharper pace of 7.36 per cent to $41.9 billion. The contraction in imports reflects slowdown in fresh investments as inward shipments of plant and machinery fell by 8 per cent during the month under review. The trade deficit narrowed to $16.2 billion in May from $18.4 billion a year ago. The dismal performance of exports comes at a time when India's economic growth has slipped to a nine-year low of 6.5 per cent in 2011-12 and flat industrial output growth in April.
During April-May 2012, shipments contracted by 0.69 per cent to $50.13 billion from $50.48 billion in the same period last year. The decline in exports in May was particularly witnessed in top exporting commodities such as petroleum products (-26 per cent), engineering goods (-15.67 per cent), gems and jewellery (-9 per cent) and readymade garments (-15.82 per cent).
Oil imports during May, 2012, were valued at $14,987.2 million, which was 14.02 per cent higher than oil imports valued at $13,144 million in the corresponding period last year. Oil imports during April-May were valued at $28,896.3 million which was 10.51 per cent higher than that of $26,148 million in the corresponding period last year.
Non-oil imports during May were estimated at $26,959.9 million, 16.11 per cent lower than $32,137.9 million recorded in May, 2011. Non-oil imports during April-May were valued at $50,992.5 million, 8.49 per cent lower than the level of such imports valued at $55,723.2 million in the year-ago period. The trade deficit for April-May was estimated at $29,752.08 million which was lower than the deficit of $31,384.36 million in the comparable period in the previous year.
The Federation of Indian Export Organisations (FIEO) President, Rafeeque Ahmed said the decline in exports was on account of global trade slowdown and deceleration in domestic manufacturing. “Many countries are facing huge setback in exports, and India is no exception to it,” he added.
“Exporters should explore new markets, find new buyers in the existing markets and take full advantage of fall in the rupee,” he said.