AF,
1. Y-o-y for Dec (2008/07) exports are down by 1.1% in dollar terms, what is the corresponding imports numbers? I can look up, but please add to your post.
2. If our Rupee has depreciated against currencies of our major trade partners, (leave dollars out of reckoning here, as US is a different kettle of fish) the Forex markets are counting on worsening of our BOP position. 
3. Inflation is tamed by government numbers. What is the street feeling? Can you bring home more for your Gandhi(Rs500) today than 6 months ago?
4. Stimulus requires the economy to spend more, and save less, which is what we were doing and ended up riding the inflation tiger. This means inflation is good, and let us pray for it too return..
5. Add another half or one million NRIs to return, most to end up in Kerala. If "Buy American' clause of US Stimulus Package is disguised and retained, and the Bailout firms are denied cheaper imported manpower, we can see more good, services and people staying at home.
6. China has downgraded its growth ambitions to 9% (I think it will be lower than that, expecting a shrinkage actually), India growing at old Hindu rate of 2% is a distinct possibility, what I have been consistently predicting. But I earnestly hope and pray that I am wrong.

My evening walking hour begins now, and I will chew on this subject..:D

@LP,

1) The Import growth, too, slowed down on the back of a depreciating rupee to 8.8 per cent rising to $20.25 billion from $18.61 billion on a Y-O-Y basis. 

2) I guess the 250 billion foreign exchange reserve would cushion us for sometime.. though i guess India cannot keep on running huge trade deficits for long. The invisible receipts currently are positive ( as far as I could check the net inflows were to the tune of 48 billion dollars for the period April - September 2008 ) which should be a comforting factor..

3) I guess the vegetable prices have dropped slightly.. other stuff seem to be unaffected.

4) I guess let there be some more rate cuts .. ( private sector banks like ICICI are still charging around 15% interest rates on their loans! ) before inflation starts moving up.. anyways.. I guess 5% is still a 'high' inflation.

I don't know if these legislation in US would have any effect.. yes Indians going on H1B visa and working on-site might reduce .. however I don't see off-shoring to stop. It might end up that more work is done off-shore rather than the IT professionals going on-site and working from client locations..  and anyways, most of the US firms have large centers in India now.

AF

the fall in exports is not to be accounted for entirely by the depreciating rupee.  There has been a serious fall in volumes in most commodities, spices, tea, fisheries, handicrafts, leather goods, textiles etc..thanks to a low demand globally.  Some of these contracts are placed months in advance, so the fall in rupee in the past three months would not have affected the exports during the period.  Whatever exports were done for 3Q would have gotten the benefit of the INR/$ ex rate.

That is a 9.9% increase in trade deficit, a whopping annual number, which can wipe out the reserves in less than two years!

Yes LP, on a Y-O-Y basis if you see the deficit this month has also increased.. but if yo see on a monthly basis, this is the first time since July 2008 that we are seeing a trade deficit in single digit billion dollars and we have to thank the drop in crude bill for it ( it has come down nearly fifty percent). 

The Trade deficit for the FY 08-09 till the month ended January 09 provisionally has crossed the 100 billion dollar mark. However if we take the average deficit for the months December and January, they stand around 8 billion dollars per month. If this trend continues, it should mean a over 30% drop in trade deficit in FY 09-10. A trade deficit of nearly 8 billion dollars p.m should be a manageable figure given that invisible receipts stood at nearly 8 billion dollars p.m for the half year April-September 2008.     

for persentation