Job Losses Mount in India's Export Sector

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06 February 2009

In India, job losses in the export sector could mount up to 1.5 million by next month. The export sector is one of the worst hit by the global economic slowdown.  

The news in India, as in many other countries, is grim. According to the Commerce Ministry, recent months have taken a huge toll on employment in the export sector.

Officials and export organizations say since September last year, an estimated one million workers have lost jobs. Another half a million are likely to be laid off by March as units across the country scale back production.  

The textiles and gems and jewelry industries are some of the worst affected as their main markets are the recession-hit economies of the United States and Europe.

The president of the Federation of Indian Export Organizations, A. Sakthivel, says many importing companies in the West have cancelled orders since the downturn in the global economy began last year.

"If you see the export figures from October-November-December-January, it shows there is a downtrend?There is a reduction or minor growth rate. Already people are giving less working hours and less working days," said Sakthivel.

In January, exports plummeted by as much as 20 per cent. The government is warning that at least some export units may be forced to close their operations.

India's export sector is labor intensive, and employs about 150 million people across the country - the largest number in any industry after farming.      

The government says exports this fiscal year which ends in March will add up to about $175 billion, down from $200 billion in the previous fiscal year.

The export sector is not the only one which is adversely affected. A survey by the Ministry of Labor and Employment says tens of thousands of jobs have also been lost in sectors such as automobiles, transport and mines in recent months.

The government says it plans to increase spending on infrastructure projects to create new jobs. It has also cut taxes to help businesses survive the economic downturn.

India's economy grew at about nine per cent in the last three years, but growth is expected to drop to six to seven per cent as the global downturn takes its toll on the country.