Reflecting the impact of demand slowdown in major markets like the US and European Union, exports growth in September plunged to 10.4%, from the average growth of 35% in the first five months of this fiscal.
Shipments in September were worth only $13.74 billion. With this, the total exports till now in this fiscal are $95 billion. The export target set by the government for this fiscal is $200 billion.
?This (the slowdown in exports) is an indication that the months to come will be challenging ones for exporters. With recession in the US and EU (both are expected to grow at a minuscule 0.1%), the traditional sectors will be affected. We fear that there would be production cust and job losses,? Ajay Sahai, director general Federation of Indian Exporter Organisations, the apex body of exporters said.
Though hopeful that the export target of $200 billion would be achieved, commerce and industry minister Kamal Nath had said last week that the global economic gloom may have an impact on exports.
Commerce secretary G K Pillai had said that the commerce ministry, which is in close touch with the other departments of the government, banks and the Reserve Bank of India (RBI), would soon submit a detailed proposal to the finance ministry to help exporters tide over the global financial turbulence.
He told reporters on Monday that the government would shortly constitute a high-powered committee to resolve the problems faced by India Inc, minimise the impact of the global credit crisis on the Indian economy and to prevent job losses.
Meanwhile, increase in price of oil ? a commodity that comprised over one-third of the total imports ? mainly led to a 43.3% rise in total imports in September to $24.38 billion. This in turn resulted in doubling of trade deficit to $10.63 billion in September, from $4.55 billion in September last year.
Sahai said the fall in oil and metal prices would help bring down trade deficit, though it would cross the $100 billion mark by the fiscal-end. The trade deficit for April-September period has already touched $59.7 billion, from just $39 billion during the same period last fiscal.
In September, the country had shelled out 57.1% more for oil imports at $9.09 billion, as against $5.7 billion in September last year.
But all is not lost for exporters. Nagesh Kumar, director-general, Research and Information System for Developing Countries (RIS) said rupee depreciation (which is about 25% in this fiscal) and diversifying exports to growing markets like East Asia, Latin America and Africa can also help in moderating the impact of the slowdown in demand in Western countries on India?s exports.
In rupee terms, however, exports jumped 36.7% during April-September in this fiscal to Rs.405118 crore from Rs.296423 crore in the same period last year.
Non-oil imports, including capital goods needed for industrial production, recorded 36.2% growth to $15.28 billion. Non-oil imports during April-September in this fiscal were valued at $99.68 billion, 29.3% higher than that during the corresponding period last fiscal.
