India is facing a threat of dwindling exports as leading world economies are heading towards a slowdown and the country's trade deficit for the current fiscal is expected to be around $121 billion, says research firm Dun & Bradstreet.
Exporters of the country are under increasing pressure as the US, which is the single-largest export destination for Indian goods and accounted for about 13 per cent of Indian exports in 2007-08, is heading for a possible slowdown.
Considering the magnitude of trade transactions and the current economic environment in the US, it has become even more imperative for Indian businesses, especially exporters, to exercise abundant caution in cross-border transactions, Dun & Bradstreet said in its latest report.
"As India is an export-led country, slowdown in the global economies is likely to dent the growth prospects for India. For the current financial year, we are projecting 7-8 per cent growth; however, the coming year looks challenging," D&B Chief Operating Officer Kaushal Sampat said.
According to D&B research, Chapter 11 filings for commercial businesses have increased from around 3,600 in 2006 to an estimated 6,700 in 2008, registering an 84 per cent rise while chapter 7 filings have increased from around 11,400 to an estimated 25,000 during the same period, a rise of 116 per cent.
Under Chapter 11, a bankrupt company tries to reorganise its business in order to become profitable again. Its management continues to run day-to-day business operations but all significant business decisions must be approved by a bankruptcy court. In the case of Chapter 7, the company stops all operations and goes out of business.
