'High growth nations emerges India's top export destinations'

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SME Times News Bureau | 23 Jul, 2012
India has rapidly diversified its exports markets from the traditional export partners towards emerging and developing economies, a PHD Chamber of Commerce and Industry said on Saturday.

"This has played a crucial role in cushioning India's exports growth during the recent years, which has remained fairly steady despite global economic slowdown," said chamber in a press release in New Delhi.

The high growth destinations, such as East Asian and South-East Asian economies like China, Singapore and Hong Kong have dominated the India’s exports scenario with the third, fourth and fifth positions during 2012.

This marks a considerable leap taken by these economies in this respect, as compared to 2001 and 2006. Indonesia, one of these economies has also emerged among the top ten export destinations in 2012.

It said, the rapid diversification of India's export destinations is encouraging. The widely spreading export markets can be noted from the narrowing dependence on selected economies for exports. The share captured by the top ten exports destinations have been narrowing from 57.7 percent in 2001, to 57.3 percent in 2006 to 51.6 percent in 2012, indicates the increasing share of a larger number of economies in India’s exports market.

However, the diversification of exports markets by India may not work for longer as contagion of Euro zone crisis on demand conditions in emerging and developing economies is spreading.

IMF has already reduced the growth of world trade volume to 4 percent in 2012 from 5.8 percent in 2011 and 12.9 percent in 2010. The lead indicator for demand scenario, the growth of private consumption in newly industrialized Asian economies is falling year after year.

It may be mentioned that India's exports for the month of June 2012 registered a decline of (-) 5.45 percent, at USD 25.07 billion compared to June 2011 when it stood at USD 26.51 billion. The cumulative figure for the period of April-June 2012 shows exports at USD 75.20 billion registering the negative growth of (-) 1.7 percent.

Going ahead, steps should be speeded up to conclude our ongoing Free Trade Agreement (FTA) negotiations with EU and Australia, which would provide additional market access for our goods. Non Tariff Measures should be addressed both through the FTAs as well as the WTO negotiations.

More and more efforts should be made to reduce our trade related transaction costs, which currently impede exporters' performance in the international markets. Infrastructure bottlenecks, especially in respect of power, roads, railways and ports should be addressed on priority basis, the PHD Chamber suggests in the release.