In contrast to official optimism about recovery in India's global shipments after September this year, financial services major Citi has estimated 10 per cent contraction in the country's exports in the current fiscal.
"Exports are are likely to remain in the red for the next few months," the Citi group report 'India Macroscope' said, adding given the high base effect, trade numbers in the coming months are likely to remain in the negative territory.
The global financial services group, which itself saw turbulent times, also estimated 15 per cent shrinkage in imports.
In 2008-09, exports grew by a meager 3.4 per cent to $168.7 billion, while imports were at $287.7 billion.
Exports have been shrinking for the last seven months since October in a row.
On the import front, Citi said higher oil prices would impact the external account given the fact that India imports 70 per cent of its crude requirement. However, new hydro- carbon discoveries limit the rise in trade deficit, it added.
Commerce and Industry Minister Anand Sharma had said exports are expected to see recovery after September and the government would make efforts to ensure that the shipments do not contract further.
As per a report of the Labour Bureau even after five lakh lay-offs in export oriented units in the third quarter of the last fiscal there were 2.79 lakh net jobs creation in 2008-09.
Citi expressed its surprise on the net job creations, which were due to non-export.
The financial services major further said though the government's steps to prop up shipments are encouraging, there is is a need to take structural measures to enhance export growth.
The government is likely to unveil the new five-year Foreign Trade Policy in August.
