NEW DELHI: Though India’s exports fell for the 12th month running, some key exports sectors such as fabrics, metals and marine products have reported modest to decent growth in September 2009, signalling that worst may be over. However, non-oil imports continue to decline at a steep rate.
The lower contraction in exports in September 2009 is partly due to the low-base effect as growth had already started tapering off by September last year, after the collapse of the US financial major Lehman Brothers. The base effect is likely to have a bigger impact in the coming months.
“Due to both the easing of the base as well as sequential upticks, we expect a rapid improvement in the yearly export data over the next quarter, moving into positive territory by December,” says a release by Goldman Sachs. The recovery in India’s major export destinations—the US and the Europe—will also aid exports. “There are discernible signs that the dark clouds are parting over Europe and the US," commerce minister Anand Sharma said.
Following large contraction in imports and smaller fall in exports, the trade deficit narrowed marginally to $7.8 billion from $8.4 billion in August. Though continued drop in imports should cause concern, DK Joshi of credit ratings agency Crisil does not see the contraction in merchandise imports that way.
Source : The Economic Times