Indian exports contracted for the ninth consecutive month during June, while imports dipped for the sixth month on a trot as demand in both external markets and domestic economy remained weak.

According to experts, growth rate of exports is likely to pick up in the second half of the 2009-10 financial year, mostly due to the base effect, as overseas sale of Indian goods has been in the negative territory since October, 2008.

Data released by commerce ministry on Monday showed that exports dipped 27.7% ($ 12.81 billion) in June, a marginal improvement over the previous month. Imports in the month under consideration also performed better compared to May, but remained in the negative territory with a contraction of 29.3% ($ 19 billion).

Trade deficit – difference between value of exports and imports — for the month stood at $ 6.16 billion, a dip of 32.4%, as India’s import bill remained high, compared to earnings from exports.

According to Sonal Verma, an economist with Nomura, the negative numbers are likely to continue for at least one more quarter. “Non-oil import numbers are improving compared to previous months. Exports remain sluggish but it seems the worst phase may be over,” Verma said.

“The latest trade numbers do not come as a surprise as there is hardly any additional demand in the overseas markets. Sops to support exporters will only help them gain some competitiveness and not boost exports significantly as demand remains weak,” said DK Joshi, principal economist of market rating agency Crisil.

Senior officials in the commerce ministry remained skeptical in the absence of any positive demand in overseas markets, but hope that exports numbers to improve in the second half of 2008-09.

In other Asian economies exports have been in the negative territory as well — 14 month continuous dip in Singapore, and a eight month contraction in China. But the degree of export contraction in June in most Asian countries was better than previous months.

The slump in exports since October, 2008, the longest since India initiated economic reforms in 1991, is due to lesser appetite for goods in developed economies like United States, Japan as well as European countries, which are reeling under recession. Imports in to India has been in the negative territory since December, 2008, as crude oil prices plummeted and Indian factories needed lesser raw material and capital goods due to weak a demand.

Oil imports in the month under consideration stood at $ 5 billion, half of what was seen in the year ago month. In the quarter ending June, 2009, oil imports were 56.6% lower than the corresponding month of 2008 and stood at $ 12.76 billion.

Non oil imports, comprising mostly capital goods, machinery and raw material contracted 16.5 % in June and stood at $ 16.73 billion. In the three months ending June, 2009, non oil imports stood at $ 38.16 billion, about 24.6% less than levels seen in the same period of the previous year. The government has already provided a host of export related sops since December, 2008 through three stimulus packages, which includes government subsidy for export related credit, zero duty import of raw material for labour intensive industries like leather and textile products, amongst others.

The commerce ministry is contemplating to provide additional sops to exporters to help them tide over the waning demand in overseas markets. These measures are likely to be announced in the second week of August, while releasing the new Foreign Trade Policy.