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Exporters must concentrate on markets of Latin America
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Bikky Khosla | 15 Mar, 2011
It's not surprising that India's exports to the Latin America region have increased manifolds in the last couple of years. Going by official figures, exports from the country to the region increased from USD 2.16 billion in 2004-05 to USD 6.01 billion in 2008-2009. This is an astounding growth of 178 percent. Meanwhile, exports to the LAC region have increased by 108 percent to USD 5 billion in April-September 2010 compared to the same period in 2009.
Considering this robust growth, I strongly feel that there is need for a shift in export from the northern hemisphere to the southern hemisphere - to Latin American Countries (LAC). Exporters should understand that in the near future developed nations would show an import growth of around 0.9-1 percent, while developing economies like those in LAC would exhibit an import growth between 4.5 and 5 percent - a good news for us. And what's more...the government too is supporting and encouraging exporters to explore new markets of the region.
If you are wondering what to export, here are some tips. Three product groups - textiles, engineering products and chemical products constitute the bulk of of India's exports to the region. In the textiles sector, ready-made garments, made-ups, fabrics, yarn, carpets, handicrafts, etc. are high on demand in the region. In the engineering sector, automobiles, auto components, electrical appliances, machinery, computer software, etc. have good scope for exports. Bulk drugs, pharmaceuticals, dyes and intermediates, agro-chemicals, plastic products, naphtha, resins, essential oils, molasses, tyres for buses, trucks and cycles are the other items which have great demand in the LAC region.
It think the biggest advantage for our exporters exporting to this region is that they stand to get good margins there. Moreover, exporters can take advantage of the 3 percent incentive on FOB value of exports of products exported to the region. I strongly feel that diversification of the export basket and exploring new markets will be the key to survival in the coming years. The question is are you ready?
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Exports to Latin America
Avinash Chandra Jha | Mon Mar 21 11:46:18 2011
Latin American importers till sometime back used to buy largely from the US, shows the data of US import-export. So there is certainly better margins if we export directly to countries like Chile, Peru, Panama, Mexico, etc. Unlike US they may not be very particular about the product and establishing a good association with these countries' importers could be easier than that with US importers.
Modle rail road
JOSEPH LEON | Sat Mar 19 00:48:21 2011
I wish to know that is there any market promotion of goods like this in this LAC region
Hi,
Ashish Kumar Gupta | Thu Mar 17 15:45:40 2011
I have read the News Letter. But, cannot understand on the 3% incentive on FOB value of exports of products. Could someone explain..?
Is India SELF-SUFFICIENT itself?
Kaushal Surana | Wed Mar 16 12:00:06 2011
In the article, its being suggested that yarns in the textile sector can be a good item to export. I would like to ask a very important question- Is India self-sufficient itself in the textile sector?? Its absolutely ridiculous to export such huge quantities of yarn when price of yarn has increased by over 30% within the last 3-4 months in India!!I am a manufacturer producing goods using cotton cloth,and it has been just impossible to pass on the price rise completely to the consumer. Moreover, demand has fallen considerably which is again hurting business. Should government take care of the terrible situation (Ask any indigenous manufacturer/consumer of cotton goods and he will call the current situation TERRIBLE only) in India first or just export more and more for increasing its foreign currency kitty? Sadly, this sector has been totally neglected in the current budget too.
Export TO LAC/Central America Countries
Ash Bharmal | Tue Mar 15 21:29:14 2011
Your editorial is timely. I am retired consultant and have worked in Central (Nicaragua) and Latin America (Ecuador/Peru/Bolivia). At present time, excellenct oppertunity exists for indian companies involved in Power Supply Infrastures (Towers, sub-stations etc)as these countries are upgarding and are good paymasters.
Exporters must concentrate on markets of Latin America
Jose G. Borda | Tue Mar 15 19:09:16 2011
Latin America and the Caribbean represent a vast marketplace; Countries are at all stages of political and economical development. Mexico, Brazil and Chile enjoy the leadership in political and economic stability, while Panama, Colombia, Peru, Argentina and Uruguay are working hard at becoming stable economies. The rest are still working on searching their soul and everything is possible, but of course such level of uncertainty has tremendous room for greater opportunities; if you have the stomach to support the rollercoaster for the economical and legal ride.
As we have seen Iran is very actively involved in these countries and is betting on having long term access to the raw materials needed to support a future growth and leadership, and of course in maintaining a powerful political and economical influence in the region.
Historically British, American and most recently European companies have dominated the marketplace, most Latin American countries today are very skeptical and reluctant to invest in durable Chinese products as these products definitely will not last for one generation as consumers are expecting.
So India has a golden opportunity to compete with traditional American and European companies by introducing high quality products at reasonable prices.
Furthermore, today the major countries in Latin America and ready and waiting for foreign investors to partner with them on capitalizing on these golden opportunities.
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