According to RBI, in the face of deteriorating external environment, the adverse effects of the contagion transmitting through different components of India 's balance of payments (BoP) could largely be contained through policy actions. A noteworthy feature during 2008-09 was that the effect of external shocks transmitting to India through the BoP could be contained with loss of reserves mainly in the third quarter of the year, when the global crisis deepened and spread significantly with more visible real effects.

India ’s BoP position in 2008-09 (April-December) was characterised by a widened trade deficit leading to a higher current account and lower net capital inflows. In the face of deteriorating external environment, the adverse effects of the contagion transmitting through different components of India 's balance of payments (BoP) remained largely contained.

The rapid contraction in the global trade was reflected in negative growth experienced during the third quarter, which was last observed in 2001-02. The growth in imports also decelerated to single digit level during the third quarter, led by lower crude oil prices and weakening domestic demand. The merchandise trade deficit further widened to US$ 113.8 billion during April-February 2008-09 (US $ 82.2 billion a year ago).

Net surpluses under invisibles increased in April-December 2008, primarily led by private transfers and software services, though a moderation in such inflows set in the third quarter. Thus, the current account deficit widened to a level of US$ 36.5 billion (US$ 15.5 billion in April-December 2007)

The adverse impact of the global financial market turmoil was also felt in terms of reduced inflow of the long and short-term debt and reversal of portfolio inflows. A positive development was, however, relative resilience of FDI inflows (US $ 31.7 billion in April-February 2008-09) in the face of reversal of capital flows, reflecting the attractiveness of India as a long term investment destination.

As on April 10, 2009, the foreign exchange reserves stood at US $ 253 billion, showing a decline of US$ 56.7 billion (including valuation) over the level at end-March 2008.

India’s external debt, debt sustainability indicators and the level of foreign exchange reserves continue to remain at comfortable levels and would ensure external stability.

The trade deficit for April- December, 2008 was estimated at US $ 93819 million which was higher than the deficit at US $ 58981 million during April- December, 2007.

India ’s cumulative value of exports for the period april- december, 2008 was us$ 131990 million (rs.585594 Crore) as against us$ 112737 million (rs. 454997) Registering a growth of 17.1 Per cent in dollar terms and 28.7 Per cent in rupee terms over the same period last year. Exports during december, 2008 were valued at us$ 12690 million which was 1.1 Per cent lower than the level of us$ 12825 million during december, 2007. In rupee terms, exports touched rs. 61715 Crore, which was 22 per cent higher than the value of exports during december, 2007.

India ’s Imports during December, 2008 were valued at US $ 20256 million representing an increase of 8.8 per cent over the level of imports valued at US $ 18610 million in December, 2007. In Rupee terms, imports increased by 34.2 per cent. Cumulative value of imports for the period April- December, 2008 was US$ 225809 million (Rs. 1003947 crore) as against US$ 171718 million (Rs. 693445 crore) registering a growth of 31.5 per cent in Dollar terms and 44.8 per cent in Rupee terms over the same period last year.

Oil imports during December, 2008 were valued at US $ 4712 million which was 30.9 per cent lower than oil imports valued at US $ 6824 million in the corresponding period last year. Oil imports during April- December, 2008 were valued at US$ 78827 million which was 44.8 per cent higher than the oil imports of US$ 54421 million in the corresponding period last year.

Non-oil imports during December, 2008 were estimated at US $ 15544 million which was 31.9 per cent higher than non-oil imports of US$ 11786 million in December, 2007. Non-oil imports during April- December, 2008 were valued at US$ 146982 million which was 25.3 per cent higher than the level of such imports valued at US$ 117297 million in April- December, 2007.

Gems & jewellery: During the year 2007-08, exports in gems & Jewellery sector were worth US $ 19,657.36 million dollars and registered growth of 23.13% as compared to the year 2006-07. During the period April-July of the current fiscal exports worth US $ 6296.14 million were effected as against US $ 6141.92 million during the corresponding period previous year.

Performance of Plantation Sector : 
COFFEE– The Government of India has approved the Development Support Scheme for coffee sector with a total financial outlay of Rs.310 crore during the month of March 2008. An area of 47776 hectares has been brought under plantation from January to November 2008. A new scheme on Export Promotion of Coffee and the scheme on Support for Coffee Processing have been approved by the Government of India with a total financial outlay of Rs.45 crore on April 10, 2008. The total export for the period from January to November 2008 was 2,08,023 tonnes earning a foreign exchange of Rs.2,271.81 crore against 2,04,538 tonnes earning a foreign exchange of Rs.1,773.50 crore during the same period last year.

RUBBER – India is the fourth largest producer of rubber with a share of 8.3% in the world production. The rubber sector accounts for 93% of the production and 89% of the area with an average holding size of 0.5 hectare. Natural rubber export and import is expected to reach 72,000 tonnes and 80,000 tonnes respectively in 2008. The Rubber Training Centre received ISO: 2000 certificate in June 2008.

SPICES – Indian spices industry recorded an export of 4,44,250 tonnes worth over US $ 1 billion during the year 2007- 2008. It marked a quantum leap of 19 per cent in volume and 24 per cent in rupee value. Mumbai is the major hub for export of spices and has alone accounted for 39% in volume of the total spice exports during the last financial year.

TOBACCO – India earned a foreign exchange of Rs.2,022.78 crore and Rs.10,271.55 crore as excise revenue in the year 2007- 2008. The exports of tobacco and tobacco products during 2007- 2008 were valued at Rs.2022.78 crore.