Exports decline 29.2% in May on lower demand from US, Europe

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New Delhi: Exports continued to fall for the eighth consecutive month in May, dropping 29.2% to $11 billion against $15.6 billion a year ago, on weak demand from the United States and Europe. With the latest slide, exports in 2009-10 so far have slid 31.2% to $21.75 billion as compared to $31.63 billion in the same period last financial year.

The government expressed dismay over the situation and the industry said if it continues more jobs would be lost. “Of course, it (the continuous fall in exports) is a matter of concern. There are no signs of revival in the exports demand yet,” commerce secretary Rahul Khullar told reporters here.

Commerce and industry Minister Anand Sharma promised cheaper credit to the exporting sectors to help them lower the prices of goods. “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,” he said, adding that the second half of 2009-10 would be better for exports. “Although India’s exports may stabilise in the next few months, a solid recovery is not expected until well into 2010,” Moody’s Economy.com said, adding that the US economy is likely to bottom out in October.

The government has already given incentives worth more than Rs 1,800 crore to the exporting community, as Indian exporters faced tough times in the global market with lower demand for their goods. In 2008-09, the country achieved exports of $168.7 billion, a growth of 3.4% over the previous year. The final outcome was lower than the target of $170 billion, which was revised downward from $200 billion in the light of weak global economy.

The situation has not changed with the start of the current financial year. In April 2009, the overseas sales dropped most in 14 years to $10.74 billion from $16.08 billion a year ago. “This is serious. Overseas buyers are making queries but we are unable to transform that in orders due to higher prices vis-à-vis other countries. Although we are doing our best, the government has to support us,” Federation of Indian Export Organisations’ president A Sakthivel said.