Sept. 1 (Bloomberg) -- India’s exports declined for a tenth straight month in July as the global recession eroded demand in the nation’s biggest overseas markets in the U.S. and Europe.
Merchandise shipments dropped 28.4 percent from a year earlier to $13.6 billion after sliding 27.7 percent in June, the government said in New Delhi today. Exports plunged 33.26 percent in March, the biggest fall on record, according to Bloomberg data going back to April 1995.
India last week extended tax refunds to exporters and announced incentives to explore new markets in Africa and Latin America. Trade Minister Anand Sharma last month signed free- trade accords with South Korea and the 10-member Association of Southeast Asian Nations as India tries to reduce dependence on the U.S. and Europe, which account for 40 percent of exports.
The government’s efforts are “aimed at arresting the exports decline and protect employment,” said Rohini Malkani, an economist at Citigroup Inc. Shipments are likely to decline by 10 percent to $158 billion in the current fiscal year to March 2010, Malkani estimates.
The global recession hit Asia hard as the region is almost twice as reliant on exports as the rest of the world. South Korea’s exports fell 20.6 percent in July, the tenth consecutive monthly decline, a report showed today. Japan’s exports tumbled 36.5 percent.
Global Trade
The continued risk of sluggish demand prompted the World Trade Organisation to lower its forecast for trade in goods for 2009 in July. The trade arbiter now expects a drop of 10 percent after forecasting a 9 percent contraction in March.
India has been hit by the global slump as it becomes integrated into the world economy. The volume of trade rose to about 35 percent of gross domestic product in the year ended March 31 from 21 percent in 1997-98, the year of the Asian financial crisis, according to the central bank.
Flagging exports are forcing jewelers, textiles and leather makers to scale back production and cut jobs. Exporters cut about 500,000 jobs in 10 industries, Trade Minister Sharma said on July 8.
Sharma, while unveiling the foreign trade policy for five years to 2014, last week said he expects the nation to export goods worth $168 billion in the fiscal year to March 2010 and $200 billion the following year. The South Asian nation may return to an annual average export growth of 25 percent in the three years to 2014 as global demand picks up, he predicts
Imports fell 37.1 percent in July from a year earlier to $19.6 billion, according to today’s report. Oil imports declined 55.5 percent to $5.6 billion and non-oil imports fell 24.5 percent to $13.9 billion, the government said in a statement.
India’s exports in the first four months of the fiscal year to July 31 slumped 34.1 percent to $49.6 billion, while imports slid 32.5 percent to $78.5 billion, today’s report showed.
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