Exports dip for 11 months in a row.

However, rise in FDI flow in July gives consolation

THE country's exports shrank for the eleventh month in a row in August falling by as much as 19.7 per cent on a yearly basis even as exporters look forward to Christmas buying in the US and Europe to revive sales.

" The merchandise exports were $ 14.3 billion in August down from $ 17.8 billion in the same month last year," commerce secretary Rahul Khullar said.

Khullar added, " There is a glimmer of hope, a lot would depend on the Christmas orders. Besides, the decline in shipments was the lowest since January 2009.'' The contraction in July was 28.4 per cent.

However, there was some consolation in that foreign direct investment ( FDI) inflows into the country went up despite the global recession.

Commerce and industry minister Anand Sharma said India has received $ 3.51 billion in July which represents a 56 per cent YoY rise over the corresponding figure of $ 2.25 billion.

However, the total inflows during the April- July period contracted by about 15 per cent to $ 10.53 billion over the same period in 2008- 09, due to poor accruals in the opening months of the fiscal. In the first four months of 2008- 09, it was at $ 12.32 billion.

During August, exports of rice, tobacco, fruits and vegetables, marine products, iron ore, man- made yarn and fabrics, coal, and garments have shown positive growth, Khullar disclosed.

For the first time in 2009- 10, three sectors -- rice, tobacco and fruits and vegetables -- have shown positive growth.

However, gems and jewellery, drugs and pharmaceuticals, engineering goods and leather, which are high value- added products that account for the major chunk of export earnings continue to remain in the negative zone.

Exports of gems and jewellery were $ 2.2 billion in August against $ 2.9 per cent in the corresponding month last year.

Shipments of engineering goods were valued at $ 2.6 billion against $ 3.8 billion while that of leather products was $ 0.28 billion over $ 0.35 billion.

For the April- August this fiscal, the exports contracted by 31.3 per cent to $ 63.9 billion from $ 93.1 billion in the same period of the previous year.

Currently, over 60 per cent of the country's export earnings come from western countries and the economic crisis had led to a slump in the demand for Indian goods.

The government is keen to diversify the country's export market and in the new foreign trade policy announced last month introduced higher incentives for exports to Latin American, African and CIS nations.

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