Indian Export Diversification accelerates in Asian & African Markets: PHD Chamber

Indian Export Diversification accelerates in Asian & African Markets: PHD Chamber

Indian Export Diversification accelerates in Asian & African Markets: PHD Chamber

 

No.PR-138
November 20, 2015
New Delhi

 

Indian Export Diversification accelerates in Asian & African Markets: PHD Chamber
 

India’s exports are no longer concentrated on its traditional export destinations as exporters interest towards Asian and African markets is accelerating  year after year, said Mr. Alok B. Shriram, President, PHD Chamber of Commerce and Industry.
 

However, the share of advanced economies in India’s exports decelerated from 44% in FY2005 to 37% in FY2015, added Mr. Shriram
 

The share of developing Asia in India’s exports increased from 48% in FY2005 to 50% in FY2015.  The share of Africa region in India’s exports increased from 7% in FY2005 to 11% in FY2015, he said.
 

Measuring the shift of India’s share from developed economies to developing economies by using a standard measure of export market diversification i.e. Regional Hirshman Index (RHI), India’s exports has reported a gradual shift in its export destinations from traditional to non-traditional markets.
 

However, export market concentration RHI coefficient (0.57) is still very high and gives an indication to undertake further measures for enhancing exports to different non-traditional markets, said the PHD Chamber analysis.
 

Also India’s exports product composition to different regions is still concentrated in top 10 commodities of exports.
 

More than 60% of the trade is concentrated in the top ten items of exports.
 

Measuring the shift of India’s share from traditional to nontraditional products by using a standard measure of export product diversification i.e. Sectoral Hirshman Index (SHI) has increased from 0.36 in FY2005 to 0.40 in FY2014 explaining that concentration of top ten items of exports is increasing. 
 

To become internationally competitive, Mr. Shriram suggests commodity composition of the country to be focused for diversification with the inclusion of more and more commodities in export baskets. 
 

The country needs to to provide facilitation to exporters to diversify the composition of export basket with enhanced knowledge of foreign markets regarding demand for goods in high growth emerging and developing economies, he said. 
 

More and more information about the world demand dynamics would help exporters to enhance their export baskets and manufacturers to enhance their production possibility frontiers, said Mr. Shriram.
 

Further, India needs to enhance its productivity in the manufacturing sector with a major focus on research and development and new product innovations.
 

He suggested that manufacturing processes in the country should be facilitated with the simplification of procedures and ease of doing business at the ground level.
 

Industrial infrastructure especially, the export infrastructure needs to be enhanced in terms of capacity expansion of ports, state of the art facilities in the railways and improved quality of roads.
 

The improvement in industrial infrastructure will not only improve the manufacturing competitiveness in India but also enhance its export competitiveness in the international markets, said Mr. Shriram.
 

Full research report is attached
 

Annexure
Region wise % share in India’s exports 

Regions

FY2000

FY2005

FY2010

FY2015

Exports    (US$ billions)

Share (%)

Exports   (US$ billions)

Share (%)

Exports (US$ billions)

Share (%)

Exports     (US$ billions)

Share (%)

1)  Europe

10.23

25.94

19.67

23.55

38.52

21.55

56.30

18.14

2)  America

9.62

24.70

16.79

20.1

26.87

15.03

59.05

19.03

Total

19.85

50.64

36.46

43.65

65.39

36.58

115.35

37.17

3)  Asia

13.86

37.44

40.00

47.88

93.33

52.21

153.81

49.57

4)  Africa

1.90

5.35

5.57

6.67

13.43

7.51

32.84

10.58

Total

15.76

42.79

45.57

54.55

106.76

59.72

186.65

60.15

5)  CIS & Baltics

1.06

2.35

1.09

1.31

1.69

0.94

3.40

1.09

6)  Unspecified Region

0.04

4.22

0.4

0.49

4.91

2.76

4.93

1.59

Total

36.71

100

83.53

100

178.75

100

310.34

100

Source : PHD Research Bureau, Complied from Ministry of Commerce and Industry
 
ENDS.

Koteshwar Prasad Dobhal
Consultant (PR)