For the first time in three years, India's exports in October tumbled, hit by slumping demand in its key U.S. and European markets, widening the country's trade gap, data showed on Dec. 1.
Exports fell by 12% from the same month a year earlier to $12.8 billion as demand shrank. Imports meanwhile grew by 10.6% to $23.36 billion.
For the April to October period the trade deficit in Asia's third-largest economy widened 60% to $73 billion from the same period a year earlier.
"Over the last three months, export growth has averaged 8.4%, down dramatically from a peak of 43% in the three months to June," said HSBC economist Robert Prior-Wandesforde. "External demand looks to have fallen off the proverbial cliff," he said.
The October fall marked the first year-on-year contraction in exports since November 2005, when exports fell by 11.4%.
A senior government official warned last month the export growth rate would be about 10% in the financial year ending March 31, 2009, way below earlier hopes of a 25% rise, and that India would miss its year-export target of $200 billion.
The government has warned that the textile industry, India's second-largest foreign exchange earner, could shed up to half a million jobs by April 2009 as Western nations fall into recession.
Copyright Agence France-Presse, 2008