India’s exports contracted for the 10th successive month, plunging by 28.4 per cent in July as order books continued to dry out from two of the biggest growth regions—the US and the European Union (EU)—which are still in the throes of a recession.
Exports from the country July stood at $13.62 billion.
The latest data came days after the government unveiled a mix of procedural measures, fiscal incentives to increase shipments to non-traditional destinations including countries in Latin America and Africa.
The US and EU currently account for about 60 per cent of India's $168 billion exports.
Shrinking world demand has affected India’s handicrafts, gems and jewellery, leather and textile exports severely during the current financial year. Sharma said the short-term objective was to arrest the declining trend of export by providing addition support to the worst hit sectors.
The Planning Commission said this week that exports would recover next year after the world economy begins to clock positive growth.
“Exports would also recover as industrialised countries return to positive growth of one per cent in 2010 with further acceleration in 2011,” it said.
Analysts echoed similar views.
“Export orders are set to steadily recover, with more major economies expected to come out of recession in the near term,” Moody’s economist Sherman Chan said in a latest research report.
India is aiming for export growth of 15 percent over two years to achieve global merchandise sales of $200 billion by March 2011.
Data released on Monday showed India’s economy grew by 6.1 per cent in the April-June quarter raising hopes of a sustained turnaround, but scanty rainfall and plunging exports remained two major areas of concern.