Exports take hard knock in Jan, recovery hopes dash

NEW DELHI: Taking a hard knock in the recession-hit US and other major markets, India's exports nosedived by 22 per cent in January, dashing all
hopes of a recovery riding on the December figures.

After the official figures for December showed exports declining by just about 1.1 per cent, Commerce Secretary G K Pillai came out with "unexpected" trends of overseas shipments taking a plunge in January in the face of a slump in demand for Indian goods in the global market.

"It is little unexpected. There were not many orders in the last quarter," Pillai told PTI.

Pillai said India would at best achieve USD 170 bilion exports in the current fiscal. The government had set a target of USD 200 billion on the back of USD 162 billion achieved in 2007-08.

"Exports are going to come down and we have to live with it," he added.

Declining by 1.1 per cent in December, exports showed negative growth for the third month running, but the sharp fall since October was arrested giving hopes of a recovery.

Exports dropped to USD 12.6 billion in December this fiscal, from USD 12.8 billion a year ago.

A sharp correction in the crude oil prices led to the country's imports growing by a modest 8.8 per cent to USD 20.2 billion in December.

With a reduction of 30.9 per cent in oil imports, the trade gap narrowed to USD 7.56 billion in December against USD 10 billion in November.

Global research and financial services major Goldman Sachs says the prospects would remain negative even in the next fiscal. "Going forward, we expect exports to remain sluggish in FY'10."