Export scene to remain grim
The fall in India’s exports on account of the global economic downturn is likely to continue this year as well. Exports, saw a plunge of between 15 per cent and 33 per cent in the January-March quarter of 2009, are likely to remain flat this year, according to the Export Import Bank of India (Exim Bank). Incidentally, the International Monetary Fund (IMF) has predicted that world merchandise trade will shrink 12 per cent this year.
“We expect exports to start looking up only next year,” said TC Venkat Subramanian, chairman and managing director, Exim Bank.
However, Subramanian said the export growth in India was in keeping with that of other emerging economies like China, Malaysia, Indonesia and Korea, all of which also showed negative growth in the previous quarter. “Exports make up only 15 per cent of India’s gross domestic product (GDP) and therefore the economy as a whole is much better off than export-oriented economies like China and Indonesia,” said Subramanian. While China’s export growth swung between -17 per cent and -25 per cent in the last quarter, Indonesia’s exports grew between - 28 per cent and - 36 per cent and in the same quarter.
The bank, which was established in 1982 by the government to finance, facilitate and promote India’s international trade and investment, approved loans worth Rs 33,628 crore and disbursed loans worth Rs 28,933 crore in the last financial year.
The bank’s non-performing assets (NPAs) too showed a decline with gross NPAs dipping to 1.2 per cent this year from 1.6 per cent last year, even though the cost of funds increased to 7.1 per cent in 2008-09 from 7 per cent in 2007-08.