Econintersect India News Roundup: India has reported a 13.5% contraction of exports in June 2012, and has blamed the contraction on a prolonged slowdown in key markets such as Europe and the United States. The May 2012 data showed an export contraction of 4.16%, whilst imports contracted 7.36%.
Econintersect sees imports into a country as a litmus test of an economy. Import contraction is a warning sign of a soft economy. The Times of India published a report which agreed with the Econintersect view:
"The economy is slowing, industry is slowing and imports have been falling also due to the rupee depreciation. This reflects the deep slowdown," D K Joshi, chief economist at ratings agency Crisil, said referring to the slide in imports.
Using USA export / import data - the softening of the Indian economy is evident from following the blue line in the following graph.
Year-over Year Change - Imports & Export
Trying to correlate trade data between countries is problematic - especially the FAS values (free alongside ship) which may vary between the declared import value and the declared export values. Other issues are exchange rates and the delay between when a product or service is exported and when it is imported.
Further reading on Indian Economic Softness:
The country's exports fell 5.45% in June, the second successive month of contraction, as the prolonged slowdown in key markets such as Europe and the United States hurt shipments from India.
GROWTH in India is slowing. The economy expanded at an annualised rate of 5.3% between January and March, the slowest for seven years. Shoppers are scrimping. Sales of consumer durables fell by 10-15% in the year to March 2012, executives say. Indian factories cranked out 30% fewer air conditioners and 15% fewer colour televisions, official data show...
There are early indications that foreign investors are reversing their bets on India, at least when it comes to investing in stocks.
Other Indian News:
India's Tata Motors-owned British luxury brands Jaguar and Land Rover will launch several sports cars and fuel-efficient engines in the next two years, Tata group chairman Ratan Tata said Friday.
Annual spending on medicines in developing countries like India will increase from $194 billion last year to $345-375 billion by 2016, or $91 per capita.
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India's foreign exchange reserves (forex) plunged by $336.5 million to $287.62 billion in the week ended July 6, data from India's central bank showed.
Increased scrutiny of bureaucrats, politicians and executives at state-run companies by India's anticorruption authorities has had a chilling effect on some pending government and company initiatives.
The slowdown sentiment may have hit new car sales, but the used car market is still in top gear. According to a top industry official, India's used car market, roughly the same size as the new car market.
India's struggling Kingfisher Airlines said late Saturday its services would return to normal after a strike by employees over long overdue pay forced cancellation of more than three dozen flights.
India says it plans to issue fresh guidelines on sweeping new anti-tax evasion rules as it seeks to reassure rattled foreign investors and attract vital funds from abroad.