New Delhi: India's exports will register a sharp drop during the coming six month period, according to credit rating agency Moody's.
Exports, which have already been declining on account of recessionary tendencies in the developed economics of importing nations, will see a "sharper slowdown" during the first half of 2009, putting the country's trade balance under increasing pressure.
India's exports, which had witnessed 30.9-per cent growth during the first six months of 2008-09, contracted by 12.1-per cent in October for the first time in five years. The same trend continued during november, with exports falling to $11.5 billion from $12.7 billion in the corresponding period a year ago, which left a trade deficit of $10.1 billion, a shade lower than $10.5 billion than the month before.
Moody's has also said that India's imports would also drop on account of higher spends on infrastructre during the first six months of 2009. The rating agency said that both imports and exports are expected to moderate further during the first half of 2009,even as inbound shipments could slow down at a milder pace on account of continued infrastructure development in the lead up to the 2010 Commonwealth Games.
Imports in October 2008 had grew by 10.6 per cent, but dropped to 6.1 per cent in November 2008. India's exports were at $119.3 billion during April-November 2008.
Moody's also said India's economy, which had slowed from 7.9 per cent in the June quarter to 7.6 per cent in the September quarter, would see a further deceleration that would be more notable during the final quarter of the current fiscal year.
Oil imports up
India's oil imports during November 2008 increased 12 per cent at $7.2 billion, against $6.4 billion during the corresponding period in 2007. Moreover, the fall in the prices of crude oil, which had reduced by over $100 per barrel since July 2008, led to a decrease in the oil import bill.
By contrast, non-oil imports including raw material and capital goods grew by only 3.4 per cent at $14.31 billion, as against $13.84 billion in the same period a year ago. Media reports attributed this to lesser production by Indian industry, and a postponement of expansion plans.