With falling overseas demand for Indian goods on account of global financial crisis, the Indian exports continued their downward movement for third consecutive month in December 2008.
The Indian Ministry of Commerce said exports from India fell third time in a row during December 2008 (since October 2008), as reported by The Wall Street Journal.
Exports declined 1.1% from the same month a year ago to $12.70 Billion during December 2008. Products such as handloom, gems & jewellery, textiles and chemicals continued their downward movement in exports. Among these products, handlooms and handicrafts were heavily battered as their export growth dipped to -64% in December 2008. Oil export tumbled by 30.9%. Exports of gems & jewellery and chemicals and textile slipped an estimated 21% and 13% respectively.
As the global economy is passing through tough phase that almost dried up goods demand, the Indian exports drastically fell for third consecutive month in December 2008. Thus, the sector hit by a sharp decline in overseas demand.
However, the exports declined comparatively less in December 2008 against the previous two months. The total exports decline in October 2008 stood at 12.1%, higher than November 2008 when it was recorded at 9.9%.
Moreover, the export growth is projected to slow down to 17% in the year ending March 31, 2009 from 25% in the previous year. Although the exports rose in the last quarter of FY 2008-09, the target of $200 Billion export set for 2008-09 would prove to be difficult to achieve.
The continuous fall in exports is making thousands jobless and it is expected that declining exports will raise the unemployment to 10 Million by the end of March 2009.
To provide relief to exporters, the Central Bank extended the duration of subsidized pre-shipment credit to nine months from previously six months in November 2008. It also raised the export refinance for commercial banks.
According to a Research Analyst at RNCOS, “The recession is darkening its impact on the global economy and this is pushing the demand for Indian goods down. The situation will remain intact unless the global economy recovers. Well, conditions are expected to get better by April-May 2009; till then, exporters keep their fingers crossed.”
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