India’s exports better placed in its product diversification: PHD Chamber

India’s exports better placed in its product diversification: PHD Chamber

India’s exports better placed in its product diversification: PHD Chamber

 

No.PR-74
August 12, 2016
New Delhi
 

India’s exports better placed in its product diversification: PHD Chamber
 

India’s exports are better placed in product diversification as concentration of its top ten export products is only 58% as compared to most of the top ten leading export countries of World viz. Hong Kong (89%), Republic of Korea (86%), Japan (77%), UK (71%), Germany (70%), USA (68%), China (68%), Netherlands (63%) and France (60%), said an analysis conducted by PHD research Bureau of PHD Chamber of Commerce and Industry (for details refer Annexure I).
 

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 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 showed lackluster performance due to 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 said Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry.
 

As world economy witnessed 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 (for details refer Annexure II).
 

Further, 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, he said.
 

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, said Dr. Mahesh Gupta.
 

Going ahead, there is 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 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, said Dr. 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.
 

 Annexure- I

Table 1: Top 10 export products (share) of top 10 world exporters (in %)

Ranking of World's Top ten export countries

Exporting countries

Share in world exports (%)

Top 10 export products         (of respective exporters)

% share of products in country's total exports

7

Hong Kong

3.1

Electrical and electronic equipment; Pearls*3; Machinery*1; Apparatus*4; Plastics and articles thereof; Apparel knit; Clocks and watches; Apparel not knit; Toys and games.

89.16%

6

Republic of Korea

3.2

Electrical and electronic equipment; Vehicles*2; Machinery*1; Ships and other floating structures; Minerals and fuels; Apparatus*4; Plastics and articles thereof; Iron and Steel, Organic Chemicals; Articles of iron and steel.

85.68%

4

Japan

3.8

Vehicles*2; Machinery*1; Electrical and electronic equipment; Apparatus*4; Iron and Steel; Plastics and articles thereof; Organic chemicals; Ships and other floating structures; Minerals and fuels; Rubber and articles thereof.

77.45%

9

UK

2.9

Machinery*1; Pearls*3; Vehicles*2; Pharmaceutical products; Minerals and fuels; Electrical and electronic equipment; Aircraft/Spacecraft and parts; Apparatus*4; Organic chemicals; Plastics and articles thereof.

71.08%

3

Germany

8.2

Vehicles*2; Machinery*1, Electrical and electronic equipment, Pharmaceutical products; Apparatus*4; Plastics and articles thereof; Aircraft/Spacecraft and parts; Mineral oils and fuels; Articles of iron and steel; Organic chemicals.

69.64%

2

USA

9.2

Machinery*1; Electrical and electronic equipment; Aircrafts/Spacecrafts and parts; Vehicles*2; Mineral oils and fuels; Apparatus*4; Plastics and articles thereof; Pearls*3; Pharmaceutical products; Organic Chemicals.

68.34%

1

China

14

Electrical and electronic equipment; Machinery*1; Furniture, lighting; Apparels knit; Apparels not knit; Apparatus*4; Plastics and articles thereof; Vehicles*2; Articles of iron and steel; Footwear ,gaiters etc.

67.59%

8

Netherlands

2.9

Machinery*1; Mineral oil and fuels; Electrical and electronic equipment; Pharmaceutical products; Apparatus*4; Plastics and Articles thereof; Organic Chemicals; Vehicles*2; Iron and steel; Live trees and plants.

62.96%

5

France

3.5

Aircrafts/Spacecrafts and parts; Machinery*1; Vehicles*2; Electrical and electronic equipment; Pharmaceuticals; Minerals and fuels; Plastics and Articles thereof; Apparatus*4; Beverages and vinegar; Essential oils and cosmetics.

60.15%

19

India

1.6

Pearls*3; Minerals and fuels; Vehicles*2; Machinery*1; Pharmaceuticals; Organic chemicals; Apparel not knit; Electrical and electronic equipment, Apparel knit; Cotton.

58.09%

10

Italy

2.8

Machinery*1; Vehicles*2; Electrical and electronic equipment; Pharmaceutical products; Plastics and articles thereof; Articles of iron and steel; Minerals and fuels; Furniture, lightings; Apparel not knit; Pearls*3.

57.98%

Source: PHD Research Bureau, compiled from UNCTAD and ITC Trade Map.

 

 

Ends.
 

Koteshwar Prasad Dobhal
Consultant (PR)