Global recession and turnaround strategies for India's export sector

The world economic crisis was first surfaced in the US Sub-Prime mortgage market in August 2007 and because of the growing pace of globalization its negative repercussions were gradually spread to the entire world economy. Indian Economy is also not an exception. Undoubtedly for more than a year since the outbreak of the crisis, India was not significantly affected but after September 2008 because of the reversal of capital flows, slowing down of the external demand, supply-demand imbalance in the foreign exchange market, all the sectors viz. agriculture, industrial, construction, mining started showing the falling trend. Owing to the greater external orientation of Indian Industry both for exports and imports, the economic meltdown has also had an adverse impact on the export sector. India's merchandise exports, after recording a steady growth of 33.7% during April-August 2008, witnessed deceleration in September 2008. Subsequently, exports recorded a decline. If we observe the exports of principle commodities specifically,all the major exporting commodities, rice, raw cotton, sugar, iron ore, iron and steel, gems and jewellery, textile and clothing showed sharp deceleration leading to decrease of export growth rate from 23 percent in the year 2007–08 (April- December) to 17.5 percent in the year 2008–09(April-December) [Economic Survey, April, 2009].In order to arrest and reverse the declining trend of exports and to provide additional support especially to those sectors which have been hit badly by recession in the developed world government has undertaken various fiscal and monetary stimulus measures and as result after experiencing sharp fall for the last thirteen months, India's export sector started reviving since December,2009. No doubt, India was able to revive its export sector relatively faster than the other countries but the major concern is all these measures were undertaken to cope up with the short term downfall situation, these are not the solutions for the long term stability and growth of exports from India. But, given the high concentration of exports with few developed countries, it has become important to design the strategies for a long term sustainability of export growth. So, in this study we have made an attempt to analyze the impact of downturn of world economy on Indian Export Sector, particularly on the exports of principle items and suggesting few strategies to promote India's exports for a sustainable long term growth.