2 Jun 2012

India export growth continues to slow

9:34 am on 2 June 2012

A sharp slowdown in India's foreign trade is adding to the woes of Asia's third-largest economy and piling more pressure on the country's coalition government to take steps to boost economic growth.

India has been hit by falling demand from its traditional export markets such as the United States and Europe.

Indian exports inched up 3.23% to $US24.5 billion in April from a year earlier, data released on Friday confirmed.

The figure is a far cry from the more than 20% growth recorded in recent years and followed a fall in March.

The data added to an already gloomy economic picture, with GDP data on Thursday showed the economy grew at its slowest pace in nine years in the first three months of the year. The rupee has also tumbled to record lows this week.

The government of Prime Minister Manmohan Singh has blamed the economic downturn on high global oil prices and the euro zone debt crisis, while insisting that this is a temporary blip and growth prospects are still good.

This has infuriated investors who say a string of policy U-turns by the government and its failure to take aggressive action to narrow its rising trade and budget deficits and encourage more foreign investment are also to blame.

The government has also had to contend with a national strike on Thursday against a steep petrol price hike.

The increase was praised by investors but is now expected to be partially rolled back within the next few days, Reuters reports.