NEW DELHI: The rot that has crept into Indian exports, which came down 22% in January 2009 over the previous year, seems to have spread across
sectors.
Product-wise quick estimates reveal that all sectors, except engineering goods and some cash crops, went down in January. The sectors that suffered the sharpest fall include handicrafts, carpets, textiles, ready-made garments, gems & jewellery, plastics, rice, and metals and minerals.
The overall export growth in April-January 2008-09 was relatively better at 11.9% ($143 billion) thanks to a robust 30% export growth in the first half of the fiscal.
Interestingly, most of the sectors severely affected in January 2009 also took a drubbing in the ten-month period. The figures have been compiled by the directorate general of commercial intelligence & statistics under the commerce department and will be updated later in the month.
According to officials in the commerce department, exports would remain sluggish not only over the next few months but also in the next fiscal. “Exports are down because of a fall in demand in the international market. There is little that the government can do about it. However, we have been trying to give exporters relief by removing internal bottlenecks affecting their performance,” an official said.
Textiles, yarn and garments, which together constitute the fourth-largest exporting sector in the country, went down sharply in January 2009 primarily due to fall in demand from the US and the EU. Export of cotton yarns and fabrics declined 34.5%, manmade yarns and fabrics went down by 32.5% while ready-made garments dipped 2.5%.
In the April-January 2008-09 period, export of cotton yarn and fabric declined by 9.3% to $3.38 billion while man made yarns and fabric and ready-made garments posted marginal growth of 3.8% ($2.46 billion) and 1.4% ($7.88 billion), respectively.
Gems & jewellery, India’s third-largest export earner, have also been massively hit in the current fiscal. With demand for high-end items in the western market disappearing, exports of the product experienced a dip of 33% in January 2009 ($1.1 billion)over the same month of 2008. In the April-January 2008-09 period, exports of gems & jewellery declined by 9.7% to $14.61 billion.
Engineering goods, the largest exporting sector, proved to be a welcome exception by posting a growth of 25.1% during April-January 2008-09 to $33.03 billion. In January 2009, though, growth decelerated to 4.7% to $3.08 billion.
For petroleum products, the second-largest export earner, while the ten-month average of exports shows a healthy 24% growth at $27.18 billion, January proved to be bad with exports declining 24.6% to $1.8 billion.
The handicrafts and carpets industry, which are important because of the large number of people they employ, suffered the most severe setback. Handicraft exports fell 72.5% to $121 million in April-December 2008-09 while export of carpets declined 22.6% to $608 million during the period.
Source : The Economic Times