US crisis may hit India’s exports: Rangarajan

August 1st, 2011 - 10:18 pm ICT by IANS  

New Delhi, Aug 1 (IANS) The possible slowdown in the US economy as a result of the debt crisis will hit India’s growth, C. Rangarajan, chairman of the prime minister’s economic advisory council, said Monday.

“Any slowdown in the US will have an impact on India in terms of our ability to export,” Rangarajan told reporters about the implications of US debt crisis on Indian economy.

Rangarajan, also a former governor of the Reserve Bank of India, pointed out that Indian exports had declined sharply in the second half of 2008-09 due to a slowdown in the US economy.

In its economic outlook for 2011-12, the prime minister’s economic advisory panel has pegged India’s total exports for the current fiscal at $330.2 billion as compared to $250.5 billion in the previous year.

Rangarajan said merchandise trade deficit is estimated to rise to $154 billion in 2011-12, accounting for 7.7 percent of the country’s GDP. In 2010-11, merchandise trade deficit was $130.5 billion or 7.59 percent of GDP.

India’s exports surged 46.45 percent at $29.21 billion in June as compared to $19.94 billion in the same month last year, according to official data released Monday.

During the first three months of the current fiscal, exports grew 45.71 percent to $79 billion, while imports increased 36.22 percent at $110.61 billion.

Rangarajan said exports were strong in the first quarter of the fiscal but might ease in the remaining part of the year.

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