In an indication of tough times ahead, the Indian exports have been hit by the poor global economic conditions registering a growth of 3.2 per cent in April at $24.5 billion.
Significantly, imports also witnessed sharp deceleration resulting in trade deficit narrowing to $13.2 billion. The drop in the balance of trade (BoT) is expected to reduce pressure on the rupee which has lost value by about 15 per cent against the US dollar since September, 2011.
According to provisional figures released on Thursday by the Commerce Secretary, Rahul Khullar, exports in April, the first month of the fiscal 2012-13 amounted to $24.5 billion. Imports for the month grew by 3.8 per cent to $37.9 billion.
Speaking about the entire fiscal as a whole, Mr. Khullar said: "we should be lucky to get a growth rate of 10-15 per cent. The situation in Europe is disheartening. Export data shows there are serious demand problems and constraints in the Western markets.’’
Mr. Khullar said if deceleration in imports continues, the BoT pressure will be lower than last year and if it will stay at $13 billion for the remainder period of the year, then we will end the year with $156-160 billion. In 2011-12, the country's trade deficit jumped to $185 billion, highest ever in the history.
Reacting to the foreign trade data, Federation of Indian Exporters Organisation (FIEO) president, Rafeeque Ahmed said the impact of global contraction in trade is now being felt by India as well. The slowdown in new markets will be more obvious in next few months, he added.
He said the most disturbing news is the sharp decline in exports of labour intensive sectors like gems and jewellery (-25.7 per cent), readymade garments (-9 per cent), leather (3.2 per cent), electronics (5.4 per cent), plastics (2.7 per cent). "This will have serious implications on employment and may lead to sharp reduction in additional job creation and even lay offs,’’ he warned.
He urged the Government to devise suitable strategy to counter the export slowdown in the revised edition of the Foreign Trade Policy (FTP).
