India’s exports better placed in terms of its product diversification
India’s exports are better placed in product diversification as the concentration of its top ten export products is only 58% as compared to most of the top ten leading export countries of World viz. Japan (77%), Hong Kong (89%), China (68%), Republic of Korea (86%), UK (71%), USA (68%), Germany (70%), Netherlands (63%) and France (60%), said an analysis conducted by PHD research Bureau of PHD Chamber of Commerce and Industry.
Higher the percentage of the country, the more it is concentrated to exports of few products and lesser the percentage of the country, the more diversified it is in terms of export diversification of its products.
India has consistently diversified its top ten export products as the concentration of top ten export products was 60% in 2010 and 58% in 2015.
“Notwithstanding the excellent diversification of export products, India’s export growth trajectory has shown lackluster performance due to the slowdown in demand in the destination countries. Although things are improving in logistics and export infrastructure front, the cost of credit to exporters is still high as compared to its competitors in the international market,” observed Mahesh Gupta, President, PHD Chamber of Commerce and Industry.
As world economy witnessed a slowdown in demand, all the leading export countries posted a negative growth in 2015 except France. Export growth was negative in Netherlands (-17%), Italy (-13%), Germany (-11%), UK (-9%), Republic of Korea (-8%), USA (-7%), Hong Kong (-5%), China (-3%) but positive in France at (1%).
India stands 19th in the list of exporters (worldwide) with merchandise exports valued at US $262 billion. India’s share in world exports is estimated at 1.6% with a growth rate of ( – )15.5% in the year 2015-2016.
The study indicates that a ray of hope is emerging with decent efforts undertaken by the government in improving the ease of doing business and reforms in the export infrastructure
With the continuous reforms, exports showed a positive growth of 1.27% in the month of June, 2016 and hopefully one can anticipate an incremental growth scenario in the coming months too, reveals the research.
Going ahead, there is a lot of potential for India to enhance its exports as 7 out of the top 10 export destinations of India such as USA, UAE, Hong Kong, China, UK, Singapore and Germany are also among the top ten export destinations of leading world exporters.
“As these destinations are already in the focus of our exporters, the need of the hour is to enhance our competitiveness in terms of reduced costs of capital and improved exports logistics to increase our volumes of exports,” added Mahesh Gupta.
Going ahead, the continuous pace of reforms at domestic front and recovery in the international market would help India to remain in positive exports growth trajectory in the coming months.