Europe crisis hits Indian exports, growth lowest in 2 years

The Eurozone crisis has begun bitingIndian exports which grew year-on-year by 10.8 per cent to $19.9 billion inOctober, the lowest in the last two years, according to preliminary datareleased on Tuesday.

Being pushed by expensive crude oils and vegetable oils,imports grew at a faster rate of 21.7 per cent to $39.5 billion leaving a tradedeficit of $19.6 billion - the highest ever in any month in the last fouryears.

From a peak of 82 per cent in July, export growth has beenslipping to 44.25 per cent in August, 36.36 per cent in September and 10.8 percent in October.

"In any sector, it is the lowest in the last threemonths, deceleration is uniform," Commerce Secretary Rahul Khullar toldreporters here.

But, for the cumulative April-October period, exportsaggregated to $179.8 billion showing a handsome growth of 46 per cent, thanksto sterling trend witnessed in the previous months of the current fiscal.

"The picture is not going to be rosy for the next sixmonths," he said.

Steady rise of 31 per cent in imports for the seven-monthperiod to $273.5 billion has left trade gap widening to $93.7 billion.

"Balance of Trade is something to be very worried aboutbecause at this rate, it is going to breach $150 billion mark (for2011-12)," Khullar said.

The sectors which depend heavily on the European marketshave been hit hard. The electronic goods, bunch of which goes to Europe, haveshown a deceleration of 18 per cent in October. "Clearly, that is wherethe growth has contracted ...effect of what is happening there".

The export growth has been the lowest since October 2009when it contracted by 6.6 per cent.