MUMBAI, India (AP) India’s merchandise exports plunged 21.7 percent in February, the steepest annual fall in at least 16 years, as the global slump hit demand for oil and gold. Exports of goods totaled $11.9 billion in February, while imports shrank 23.3 percent, to $16.8 billion, the Ministry of Commerce said Wednesday.
India hasn’t seen double-digit declines in exports since the Asian financial crisis in the late 1990s, said New Delhi economist Saumitra Chaudhuri. “It’s rare you’ve had negative growth,” he said.
India relies less on exports to drive growth than China does, but merchandise exports still account for about 16 percent of gross domestic product. Exports have been falling since October.
The country’s trade has suffered from the sharp fall in global oil prices and collapsing demand for diamonds and gold, Chaudhuri said. Exports of refined petroleum products, like gasoline and diesel, account for 20 percent of India’s exports, while diamonds make up about 15 percent, he said.
Falling crude prices coupled with “relatively robust” domestic demand have “put exports of petroleum products down in price and quantity,” he said. Global demand for Indian diamonds has fallen by about half as consumers in prime Western markets grapple with recession, he added.
Falling oil prices have also slashed the value of oil imports. In February, oil imports totaled $4.0 billion, down 47.5 percent from February 2008, the ministry said.
Indians have also stopped buying imported gold. “We are the world’s largest market for gold,” Chaudhuri said.
Last year, India imported $12 billion worth of gold, but since December imports have collapsed to near zero, he said. Cumulative trade figures for the April to February period are rosier.
From April to February, merchandise exports grew 7.3 percent in dollar terms, to $156.6 billion, while imports grew 19.1 percent to $271.7 billion, the ministry said. The resulting trade deficit for the period was about $115.1 billion, up from $82.2 billion during the same period the prior year.