India’s exports fell the most in at least 14 years as the worst global recession since the Great Depression slashed demand for the nation’s jewelry, clothing and other products.
Merchandise shipments dropped 33.2 percent from a year earlier to US$10.74 billion in April, the government said in New Delhi yesterday. That was the biggest fall since at least April 1995, when Bloomberg data began. Exports slid 33 percent in March.
Indian Trade Minister Anand Sharma said last week the government was likely to announce steps to help exporters in the budget due in the first week of next month. Interest-rate cuts and fiscal stimulus worth 7 percent of GDP helped the nation grow by 5.8 percent in the three months to March 31, making it the world’s fastest-growing major economy after China.
“India’s low reliance on exports and an aggressive double-barreled fiscal and monetary response softened the blow to the economy,” said Rajeev Malik, a regional economist at Macquarie Group Ltd in Singapore.
Indian central bank Governor Duvvuri Subbarao on April 21 cut borrowing costs to a record low to support an economy forecast to grow at the slowest pace since 2003. He lowered the reverse repurchase rate and the repurchase rate by a quarter-point each to 3.25 percent and 4.75 percent respectively.
India’s exports, which account for about 15 percent of the economy, grew 3.4 percent to US$168.7 billion in the year ended March 31, missing a US$200 billion target.
India will endeavor to get the same amount of exports in the current fiscal year that started April 1, Sharma said. The central bank expects the US$1.2 trillion economy to expand 6 percent in the fiscal year that started April 1.
The decline in exports is likely to continue until September, Indian Trade Secretary Gopal Pillai said on April 13. Falling overseas sales may cost India about 10 million jobs, estimates from the Federation of Indian Export Organizations, a lobbying group, show.
The government has announced three stimulus packages of tax cuts and public works spending to spur slowing demand, as declining sales force companies including vehicle maker Tata Motors Ltd to pare output.
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