India's March exports to decline 15-20 per cent: G K Pillai

The country's exports are estimated to have dropped between 14 per cent and 20 per cent in March, 2009 from the year-ago level, as the deepening economic downturn in key markets sapped demand for products.

The official March figures are due to be released on 1 May.

Exports are estimated to have dropped in March, commerce secretary G K Pillai said on Saturday.

"I expect that in March exports would be about $12-14 billion," he said, adding, for the fiscal ended March 2009, the total exports would be worth $168-170 billion. Up to February, overseas trade aggregated to $156.59 billion.

The commerce secretary was talking to reporters on the sidelines of an Indo-American Chamber of Commerce meeting in New Delhi.

This will be the sixth straight month of negative growth. Thanks to an impressive growth of over 30 per cent in the first half of the fiscal 2008-09, the country's annual exports are expected to end on a positive note. However, the growth would be merely 3-4 per cent over fiscal 2007-08. 

Although India isn't as dependent on external trade as its regional peers, the malaise in the global economy, coupled with the weakening domestic demand and slowing capital inflows, has dealt a blow to Asia's third-largest economy.

In February, exports registered its sharpest fall in at least 18 years.

However, the trade gap narrowed as a sharp decline in crude prices brought down the oil import bill. Merchandise exports in February fell 21.7 per cent from a year earlier to $11.9 billion.

Imports shrank 23.3 per cent in February from a year earlier to $16.8 billion. While the value of oil imports contracted 47.5 per cent to $4 billion, non-oil imports fell 10.2 per cent to $12.7 billion.

The weak outlook for external demand had in February prompted the federal government to trim its export target for the financial year to between $170 billion and $175 billion from $200 billion earlier.

The recession in the developed markets, including the US and Europe, started eating into India's exports since October 2008, when shipments fell 12.1 per cent for the first time in five years.

The Federation of Indian Export Organisations has estimated job losses of about 10 million in the export manufacturing units.

While exports grew by 18 per cent in rupee terms in the last fiscal, the expansion was largely because of about 20 per cent depreciation in the value of the local currency against the US dollar that accounts for bulk of the global trade.

However, exports during April to February, the first 11 months of 2008-09, were up 7.3 per cent at $156.6 billion from a year earlier, while trade deficit during the period rose to $115.1 billion from $82.2 billion a year ago.
 
According to government estimates, export growth for the full year ended 31 March 2009 is likely to slow to a six-year low of 7.1 per cent from 9 per cent in the previous year.