The Hindu Business Line : Exports continue declining trend

New Delhi, Jan. 1 Continuing their consecutive decline, Indian exports registered a decrease of 10 per cent in dollar terms in November 2008 fetching $11.5 billion, against $12.8 billion in the corresponding month of last year.

The relatively modest decline of close to 10 per cent is slightly better than the previous month when October exports declined by 15 per cent, reversing the sustained high growth of exports in the first half of the current fiscal.

Officials in the Department of Commerce said that as the recession in advanced countries and Europe begins to bite from September, the export growth story would continue to falter in the coming months as no growth could be feasible in an anaemic global economy.

A small crumb of comfort is that India’s cumulative exports during the period April to November 2008 increased to $119.3 billion from $99.9 billion in the corresponding months of 2007 – a growth of 19.4 per cent in dollar terms. In rupee terms, exports during April-November 2008 at Rs 5,23,879 crore (Rs 4,04,417 crore)showed a substantial growth of close to 30 per cent, thanks to the steady depreciation of the Indian rupee vis-À-vis the dollar in which most of the export receipts get denominated.

When contacted, the Minister of State for Commerce and Power, Mr Jairam Ramesh, told Business Line here that October-November numbers showed that exports remained under considerable strain, particularly in labour-intensive manufacturing such as textiles, gem and jewellery, leather, marine products and handicrafts.

Mr Ramesh argued that for labour-intensive exporting industry, restoring duty drawback rates to the previous level is more important than interest rate cuts as what is at stake is the employment of legions of skilled, semi-skilled workers. He said that it is sad that “when rupee depreciates, the Finance Ministry does not appreciate” to restore the drawback rates to exporters at the earlier level when such dispensation was made at the height of rupee appreciation vis-À-vis the dollar.

Imports rise

On the import front, November 2008 imports at $21.6 billion were slightly higher at 6.1 per cent than the level of imports at $20.3 billion in November 2007, while cumulatively import growth during April-November 2008 at $203.6 billion was 33 per cent higher ($153.1 billion).

Even as global oil prices have begun plummeting, oil imports during November 2008 at $7.25 billion were 11.9 per cent higher than at $6.48 billion in November 2007, while cumulatively oil imports during April-November 2008 at $74.1 billion were 55.7 per cent higher ($47.6 billion).

Non-oil imports at $14.3 billion in November 2008 were 3.4 per cent higher ($13.8 billion), showing how essential capital goods imports and other industrial intermediate imports have dipped in the general slowdown of industrial activity noticeable since October 2008. Overall, the country’s trade deficit during April-November 2008 at $84.3 billion was far higher than the deficit of $53.1 billion compassed in the corresponding months of 2007.