Aug. 17 (Bloomberg) -- India will seek new customers for overseas sales as recessions in the U.S. and Europe damp demand for the nation’s products, Trade Minister Anand Sharma said.
“About 60 percent of our traditional export markets are in recession,” Sharma told reporters in New Delhi today. India will be looking to expand its markets to “make sure that our exports remain competitive,” he said.
The worst global recession since the Great Depression has cut demand for made-in-Asia goods. Flagging exports are forcing Indian companies in sectors such as jewelry, textiles and leather to cut production, weakening an economy expected by the central bank to expand at the slowest pace since 2003.
The Trade Ministry will announce more assistance for exporters in a policy statement on Aug. 27, Sharma said. India’s exports dropped 27.7 percent in June from a year earlier to $12.8 billion, the ninth consecutive monthly decline. Exports plunged 33.3 percent in March, the biggest fall on record, according to Bloomberg data going back to April 1995.
“The focus of the foreign-trade policy will be to provide relief to labor-intensive export sectors,” Sharma said following a discussion on the proposed steps with Finance Minister Pranab Mukherjee.
Mukherjee in his July 6 budget announced some relief measures for exporters including extending the deadline for cheap loans and giving them financial assistance to develop new overseas markets.
Job Cuts
India’s exports in the first three months of the fiscal year to June 30 declined 31.3 percent to $35.4 billion from a year ago, the government said Aug. 3.
Declining overseas sales have resulted in companies cutting 500,000 jobs in 10 industries, Sharma said on July 8.
India is also relying on trade agreements with other countries in a bid to bolster exports as the global recession drags on demand.
India last week signed a trade pact with the 10-member Association of Southeast Asian Nations, a move that may result in trade between the two increasing to as much as $60 billion from $47 billion last year.
The trade deal is “positive from two strategic perspectives: to counter the influence of China in Asean markets and to improve India’s negotiating capabilities at an international level,” said Rohini Malkani, an economist at Citigroup Inc.
Source : Bloomberg.com