Nov exports reel under crisis ripple effect; negative trend continues

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New Delhi: Exports continued to look southward in November 2008. The overseas sales during the month fell 9.9% to $11.5 billion from $12.7 billion a year ago due to contraction in demand in the United States and the Europe. November was the second consecutive month of negative growth in overseas sales. In October, exports shrank by 12.1%, first fall in any month during the last five years.

Trade deficit during the month widened more than 33% to $10.07 billion as imports rose 6.1% to $21.5 billion. The increase in imports was largely induced by a 12% expansion in oil imports. Non-oil imports were estimated at $14.32 billion, 3.4% higher than non-oil imports of $13.85 billion in the corresponding month last year.

In rupee terms, exports expanded 12% to Rs 56,374 crore in November with the increase in exporters’ realisations due to about 20% decline in the value of the Indian currency against dollar in the last few months. The import bill grew by 31.8% to Rs 1,05,697 crore against Rs 80,171 crore.

The cumulative exports for the period from April to November grew 19.4% to $119.30 billion from a year ago. Imports during April-November rose 33% to $203.64 billion. Trade deficit for the period mounted to $84.34 billion from $53.19 billion in the corresponding period of the previous year. “Manufacturing sectors like leather, textile, gems and jewellery have been hit hard because of demand slump in the US and Europe ,” Federation of Indian Export Organisations (FIEO) President A Sakthivel said. He said export growth is likely to remain in the negative territory for the next few months.

He said that the slower growth in imports of non-oil commodities during November hints at the likely drop in manufactured output, which in turn may have a reflection on the country’s overall economic growth during 2007-08. Non-oil imports during November grew 3.4% as against 22.8% in November 2007. The manufacturing output is already in negative due to fund shortage. According to latest available data, i t dropped 1.2% year-on-year in October. The decline in manufacturing activities and exports has also hit workers in the labour intensive sectors. For instance, so far textiles and gems and jewellery sectors have trimmed workforce by 8 lakh people.