New Delhi (AsiaNews/Agencies) - Contraction continues in India's exports, which in January fell by 15.9% compared to January of 2008. Experts are already speaking of the worst crisis in decades, while government initiatives are not showing concrete effects.
Exports in January totaled 12.3 billion dollars, compared to 14.7 billion one year ago. But what is especially worrying is the rapid deterioration in the figure, after the decline of 12.1 in December of 2008 and 9.9 in November of 2008. India mainly exports textile products, clothing, jewelry, and other manufactured products. A drop in orders from abroad will have serious effects on employment. The Federation of Indian Exporters Association expects a loss of at least 10 million jobs in the export sectors by March 31.
Imports have fallen by even more, down by 18.2% in January. Experts predict that exports will remain low for a number of months, as a result of lower foreign demand, especially from the United States and Europe.
The main concern is that government efforts to foster exports, including tax breaks and incentives for the hardest hit sectors, seem to be having no effect. New Delhi has announced robust investments to support production: in January, it announced investments to support production, employment, and infrastructure totaling 200 billion rupees (4 billion dollars) for 2009. But it has difficulty providing further subsidies, because it has to deal with a budget deficit estimated at 11.4% of gross domestic product.
The Indian economy grew by 5.3% in the third quarter of the fiscal year (from October to December), compared to 8.9% in the same period in 2007. It expanded by 7.6% in the quarter from July to September of 2008. It is the lowest rate in six years, after three consecutive years of growth above 9%. The result has disappointed expectations that the country might be more resistant to the global crisis because it has an economy aimed mainly at production for domestic demand.
Analysts observe that the real rate of growth is even lower, since the estimate is based on the previous year. In reality, in the past quarter the manufacturing sector saw a decline of 0.2%, and agricultural production dropped by 2.2%. About 60% of the 1.2 billion inhabitants live in villages of less than 5,000 people, with an economy that is primarily agricultural, and experts are still uncertain about the effects this crisis will have on them.
Also worrying is the effect on the many people living in poverty: in February, the World Food Program of the United Nations estimated that 220 million people in the country are still suffering from hunger, with 56% of Indian women anemic, and about half of the children underweight (in the photo: a Mumbai slum).