India's exports in January are expected to plummet by more than a fifth as the global slowdown slashes demand for Indian goods, and the trade minister said further government aid for ailing firms may follow.
"We expect exports in January to be down 22 percent in dollar terms," Commerce Secretary G.K. Pillai said, indicating that overseas sales could decline to $11.5 billion from $14.7 billion a year ago.
Exports, which contribute close to 20 percent of the country's gross domestic product, began contracting in October after the global financial crisis froze credit markets and sent developed economies towards recessions.
But January's slump would far outstrip falls of previous months -- an annual 12.1 percent in October, 9.9 percent in November and 1.1 percent in December -- and is stark evidence of the slowdown facing Asia's third-largest economy.
"The government should immediately come up with more relief measures for exporters. Otherwise the export sector will be in a very bad shape," said A. Sakthivel, the president of the Federation of Indian Export Organisations.
Trade ministry officials say exports are expected to extend their decline for at least the next few months with recessions deepening overseas.
Export growth moderated to 17 percent in the first nine months of fiscal year 2008/09, sharply down from more than 30 percent at the end of September.
"Export growth will not even be 5 percent this fiscal year. It could be around $170 billion," Pillai told reporters on the sidelines of a conference and referring to the likely total size of India's exports.
Source : REUTERS INDIA