Exports drop 28% in July

New Delhi, Sept. 1: India’s exports dropped 28.4 per cent in July, the tenth straight month to record a fall, even as the Planning Commission saw a recovery next year when demand returns in rich nations.
The only solace in July was that imports too fell 37.1 per cent, narrowing the trade deficit to $5.99 billion or nearly half from $12.15 billion a year ago.
Merchandise exports was $13.62 billion in the month under review as demand continued to remain depressed, but the Planning Commission on Tuesday said exports would pick up after 2010 when developed markets return to positive growth.
“Exports would also recover as industrialised countries return to positive growth of one per cent in 2010 with further acceleration in 2011”, it said.
But to prop up the sector, the government in its new foreign trade policy has announced sops for trade with new markets in Latin America and Africa, which by and large remained insulated from the global crisis.
India’s imports fell sharply by 37.1 per cent in July to $19.62 from $31.18 billion a year ago, largely thanks to a drop in crude oil prices. “The imports declined mainly due to the price effect as oil prices are about 50 per cent cheaper than last year,” the Crisil principal economist, Mr D.K. Joshi, said.
The Federation of Indian Export Organisations (FIEO) president, Mr A. Sakthivel, said the declining trend is likely to continue for some more months.
“The negative trend (of exports) will continue for a few more months,” Mr Sakthivel said, expressing pessimism that $170 billion exports for this fiscal is also difficult to achieve.
India has set a target of $200 billion for 2010-11.
“It is very difficult to achieve the exports target of 2010-11 as the demand in the developed markets is still weak,” an international trade expert with Indian Institute of Foreign Trade (IIFT), Mr R.M. Joshi, said.
While the country’s oil imports declined by 55.5 per cent to $5.63 billion from $12.67 in July 2008, non-oil imports were down by 24.5 per cent to $13.98 billion in July 2009 from $18.51 billion in the same period last year.
During April-July 2009-10, exports contracted to $49.65 billion from $75.28 billion. Oil imports in the period dipped by 48 per cent to $21.96 billion from 42.21 billion in April-July 2008-09.
Non-oil imports in the first four months of this financial year declined by 23.7 per cent to $56.60 from $74.16 in the
corresponding period last year.