India is continually being pressured by the current weak economic condition as the country suffer yet another decrease in export demand for its 14th consecutive months. According to the data released by the Ministry of Commerce and Industry, India's export fell by 13.6 percent on January compared to the same month last year.
The decline marks its 14 consecutive drops putting more pressure on the country's economy. However, the Reserve Bank of India determined not to follow its counterpart like China and devaluing its currency as India is still confident with their economic condition.
The Governor of Reserve Bank of India, Raghuram Rajan told audience during a conference that "I personally feel sustained devaluation is neither feasible nor a good strategy." The decision is supported by an economist from ICRA, Aditi Nayar as quoted by Reuters to be saying that the country's poor economic is "because of the adverse impact of currency movements."
According to the data compiled by the Times of India, the export fall is mainly due to the poor performance in textiles and engineering related products. The county is currently facing fierce competition with Bangladesh and Vietnam for the textiles industry.
Besides falling export value, the country's policymaker might soon face more challenge since its import also declines by 11.01 percent to $28.71 billion causing a trade deficit for India worth around $7.63 billion.
Currently, India's gems and jewelry rose by 4 percent to $3 billion and with 81 percent jump in gold imports as more people is looking into gold investment is also helping the country to not devalue its currency.
The chairman of Engineering Export Promotion Council of India, TS Bhasin disagrees with the Reserve Bank of India's plan. He told the Economic Times that one of the main reason behind low export value is due to the overvaluation of Rupee.
He also added that if India's economic continues at the current trend, lots of SMEs will not be able to cope and could soon start letting go workers increasing the rate of unemployment. Currently, the engineering exports alone fell by 27 percent in January with most of the products are related to the oil and gas sector.
However, a sight of optimism was expressed by India's Finance Minister, Arun Jaitley as he is about to deliver the annual budget by the end of this month. Although the export and import business will slowly decline, India is still expected to be able to grow by 7.6 percent before the end of this financial year.
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