Export registers 6.6% decline in October 2009

Export registers 6.6% decline in October 2009

FDI AT US $ 15.3 BILLION DURING APRIL-SEPTEMBER 2009

Addressing a press conference here today, Shri Anand Sharma, Union Minister of Commerce & Industry, has stated that quick estimates of exports during October, 2009 indicates significant signs of stabilization and improvement in the Indian exports compared to decline of close to 39% in May 200. “The decline in exports in October 2009 was only 6.6% in Dollar terms ($13.19 Billion in October 2009 vis-à-vis $ 14.13 Billion in October, 2008). The stablisation in the exports needs to be viewed in the context of projections of IMF of 11.9% decline in world trade volume during the year 2009 coupled with 36.6% decline in commodity prices of oil, and 20.3% decline in non-fuel commodity prices during 2009”, the Minister added.

An analysis of the sectoral performance indicates that the following sectors have continued to do well with no effect of global slowdown (with increase in exports of US$ terms during April-October, 2009 as compared to corresponding period of previous year): Man-made yarn / fabric / made ups (+1.2%).; Tobacco(+20.5%); Fruits and Vegetables (+5.7%)

Further analysis shows that some export commodities which were significantly impacted by global slowdown, have now shown a turnaround in exports during October, 2009 (with positive export in October, 2009 as compared to October 2008): Plastic and Linoleum [+13.2% in Oct 09; (-) 18.6% in Apr-Oct 09]; Drugs and Pharmaceuticals [+9.3% in Oct 09; (-) 9% in Apr-Oct 09]; Marine Products[+3.7% in Oct 09; (-) 1.1% in Apr-Oct 09]; Iron ore [+250% in Oct 09; (-) 19.9% in Apr-Oct 09]; Spices [+18.2% in Oct 09; (-) 22.1% in Apr-Oct 09]; Oil meal [+19.8% in Oct 09; (-) 37.1% in Apr-Oct 09]; Cashew [+20.6% in Oct 09; (-) 21.9% in Apr-Oct 09]; Petroleum products [+7.8% in Oct 09; (-) 37.9% in Apr-Oct 09]

Some export commodities which were significantly impacted by global slowdown have shown lower rate of decline in October, 2009 as compared to earlier months: Cotton yarn / fabrics / made ups [(-)9.7% in Oct 09; (-) 28.7% in Apr-Oct 09]; Handicrafts [(-) 8.5% in Oct, 09; (-) 26.6% in Apr-Oct 09]; Basic chemicals (other than pharmaceuticals) [(-) 13% in Apr, 09; (-) 25% in Apr-Oct 09]; Gems and Jewellery [(-) 16.8% in Oct, 09; (-) 26.7% in Apr-Oct 09]; Leather and Leather manufactures [(-) 13.8% in Oct, 09; (-) 25.1% in Apr-Oct 09]; Engineering goods [(-) 14.7% in Oct, 09; (-) 30.1% in Apr-Oct 09]; Electronic goods [(-) 9.9% in Oct, 09; (-) 28.9% in Apr-Oct 09]; Tea [(-) 7% in Oct, 09; (-) 33.9% in Apr-Oct 09]

There are, however, some sectors which still continue to show significant decline in exports: Jute manufacturing including floor covering [(-)38.9% in Apr-Oct 09]; Carpets [(-)28.6% in Apr-Oct 09]; Coal and other ores including processed minerals [(-)25.3% in Apr-Oct 09]

Software exports have not shown any decline during April – October, 2009.

Overall reduction in the rate of decline of export growth in the 7 months of the current financial year, tend to indicate that the different support measures of Government, announced during the Budget and the Foreign Trade Policy, do appear to have contributed significantly in arresting the rate of decline, particularly, for labour intensive sectors.

Shri Sharma said that despite the current economic downturn, FDI inflows during April-September, 2009 were US $ 15.3 billion, which is comparable to US $ 17.2 billion received during the corresponding period of the financial year. Total FDI into India since the onset of the liberalisation process (August, 1991-September, 2009) is nearly US $ 121.85 billion.

The Minister underlined that various reports continue to place India as a highly attractive destination for investments and added that the UNCTAD World Investment Report (WIR) 2009, in its analysis of the global trends and sustained growth of Foreign Direct Investment (FDI) inflows, has reported India as the third most attractive location for FDI for 2009-2011. According to the WIR 2009 report, the top five most attractive locations for FDI for 2009-11 are China, United States, India, Brazil and the Russian Federation. India continues to attract investors in the high value-added services industries like financial services and information technology. The top position is occupied by China, while the US is the fourth in the list. The report predicts India to be on the cusp of FDI take off, in view of the Government maintaining focus on reforms, overcoming narrow business interests, de-bottlenecking infrastructure, logistics and regulatory barriers.

As regards industrial growth, the Minister informed that the impact of the stimulus packages announced by the Government can be seen in the revival of growth of the industry, particularly, the manufacturing sector and added that the industrial growth measured by Index of Industrial Production (IIP) recorded a robust growth of 9.1 percent in September 2009. Industrial recovery is generally widespread encompassing most of the sectors. He further highlighted: “The consumer durables (Passenger cars, Televisions, Refrigerators, Air conditioners), registered a double digit growth for the sixth consecutive month at 22.2 per cent in September, 2009 compared to 14.7 per cent in September, 2009. Industry groups such as basic chemicals & chemical products (20.1 percent), machinery & equipment (16.5 per cent ) and rubber, plastic, petroleum and coal products (10.1 percent) recorded a double digit growth in September, 2009.”