India's exports growth still positive with one third economies and most labour intensive products: PHD Chamber

Though India's exports have witnessed a negative growth trajectory during the last nine months (Dec 2014 to August 2015) in a row, there is a ray of hope for exporters to rebound in the coming months, according to a recent analysis conducted by PHD Research Bureau, the research arm of PHD Chamber of Commerce and Industry.

India's exports decelerated around 16% during the period April-August 2015. All the top 10 export destinations posted a negative growth, Saudi Arab (-49.7%), Singapore (-30.70%), China (-20%), Bangladesh (-16.4%), Germany (-10.3%), Hong Kong(-6.4%), UAE ( -4.8%), Sri Lanka (-4.73%), UK (-3.83%), USA (-3.82%).

Of the top 100 destinations of India's exports 68 countries have posted a negative growth ranging from 10% to over 50%.

 

Notwithstanding the deceleration in overall exports momentum, there are economies where India has posted good growth trajectory. Of the top hundred export destinations, 32 economies have posted a positive growth ranging from 2% to over 50% including Australia, Canada, Norway, Bahrain, Iraq, Czech Republic, Chili, Ghana and Afghanistan, among others.

The country's several labour intensive products have shown positive growth including handicrafts (18.6%), jute (18.17%), ceramic products (9.84%), carpet (6.3%), tea (5.3%), readymade garments (5%) and spices (0.64%), among others.

However, several export items including iron ore (-76%), petroleum products (-49.5%), oil meals (-35.3%), oil seeds (-23%), marine products (-17.4%), rice (-16.5%), meat, dairy and poultry products (-16%) have registered a negative growth during April-August 2015.

Going ahead, the analysis, on the basis of recent interactions with various exporters reveal that order books of the exporters have started reviving and we can see the exports growth trajectory turning positive in the coming months.

Exporters are enthusiastic as a ray of hope is re-emerging to increase sales in the foreign markets as the sentiments for business is improving at the domestic front and competitiveness in the global markets is improving.

However, the Government must focus on encouraging exporters to venture into new countries, launching information portals for providing comprehensive information about export opportunities in various markets.

Among the various promotional strategies starting a dedicated mobile application for foreign trade, enhancing fiscal incentives in terms of interest subvention scheme to reduce the cost of credit, reducing transaction costs by enhancing port facilities and adequate export infrastructure would be crucial to boost up the sentiments of exporters, said the industry body.

The government needs to instill more confidence among exporters by providing adequate incentives, creating conducive business environment, extending marketing support and so forth. This will help in tapping the unique potential of our country as an exporter and further will directly help to achieve the desired growth momentum and export competitiveness in global market, according to the chamber.

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