India's Exports plunge in April

India's exports fell 33.2% in April from the same month last year, due to the global economic downturn. In March too, exports slipped 33.3%, making performances in these two months the worst in 14 years. In April, exports dipped for the seventh month in a row to $10.7 billion from $16.1 billion in April 2008. As imports too fell steeply, the trade deficit went down to $5 billion in April 2009 as against $8.8 billion in the same month last year. Due to over 58% decline in oil import bill, overall imports fell by 36.6% to $15.8 billion in April 2008. Newly appointed minister of state for commerce Jyotiraditya Scindia said, “Our target is to make sure that at least we have flat growth in exports in 2009-10.’’ After an impressive growth rate of over 30% in the first six months of the 2008-09, exports started declining since October as the world economy faced the severe effect of financial crunch. This brought down the overall export growth figure to 3.4% in 2008-09 to $168.7 billion. Commerce secretary G K Pillai said the decline would continue till September. As the export figure started declining after September, 2008, the year-on-year growth figure from September 2009 could show some upward movement because of the low base. Because of the fall in prices of crude, oil imports in April contracted by 58.5% to $3.6 billion while non-oil inbound shipments too dropped by 24.6% to $2.1 billion. Meanwhile, there is some hope of revival in exports. The Federation of Indian Export Organisations (FIEO) said as inventories with foreign buyers get exhausted, exporters have begun getting orders. FIEO director general Ajay Sahai said demand for low-price articles is increasing but there still are constraints in the middle and high class segments. International research firm Moody’s said, “an annual contraction in exports is inevitable for India’’. It said the fall in imports has helped contain trade deficit. “Lower global oil prices compared to a year ago has certainly played a role in keeping overall import payments in check,’’ it said adding that the slowdown has depressed India’s appetite for imports.