IIP surge: A green shoot for Indian exports

06 Oct '09

1 min read

The fact that factory output has surged to a 16-month high of 7.8% growth in June has signaled hopes of an economic recovery. Along with this, mining has grown by 15.4%, electricity by 8%, and manufacturing by 7.3%.

Adding an icing to the cake from an consumer perspective, the other notable driver was Consumer Durables, which grew by 15.5% and which has continued a positive streak for almost three months in running.

Now, the question that experts ask, is, whether the buoyancy reflected in IIP, will be reflected in other sectors of Indian economy, particularly exports?

Dun & Bradstreet India Head (Economic Analysis) Yashika Singh positively asserts that the economy is certainly stabilizing. "Therefore, it may be premature to state that this is a sustained industrial bounce-back, and perhaps cautious optimism needs to be maintained when reading into these numbers. Nonetheless, growth in industrial production in recent months has shown signs of stability returning into the economy."

A one-time IIP surge could be an aberration, but it is too nascent and too weak to be trusted for even kick-starting the reversal of downward movement of exports, particularly garment exports.

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Fibre2fashion News Desk - India

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