Having set an ambitious goal to ship out merchandise worth $400 billion in FY22, India is firming up plans to bolster its exports of scores of key products where its share in the global market has traditionally remained paltry.
Mechanical machinery, electronics, medical and surgical equipment, sports goods, toys and certain farm commodities are among a number of products where India has the scope to substantially raise its exports, according to an analysis by exporters’ body FIEO.
For instance, in the electrical and electronics segments, India accounted for only 0.5% of the global supplies of $2,900 billion in the calendar year 2020.
Similarly, while global imports of mechanical machinery and parts stood at $2,142 billion in 2020, India’s exports were just $18 billion, with a share of under 1%.
Of course, India’s exports have risen at a faster pace than the global average in such capital and consumer goods in the last five years, it was aided by a low base. FIEO’s analysis is part of its broader exercise to devise new strategy to improve exports.
Importantly, the rollout of production-linked incentive schemes for electronics products last year will help bolster our manufacturing base, which will ultimately help outbound shipments, FIEO reckons.
In medical & surgical equipment, against global imports of close to $592 billion in 2020, India’s exports were only to the tune of $3.1 billion. In sports goods and toys, India’s exports stood at just $380 million, against the global supplies of $120 billion in 2020.
As such, India’s exports have trailed the global average in the last five years through 2020. While global imports grew at a compounded annual growth rate (CAGR) of 3% during 2016-2020, India’s exports rose at only 2%. Of course, the outbreak of the pandemic and consequent lockdowns impacted India more adversely than most others in 2020.
However, what is a matter of concern is that exports from labour-intensive sectors are losing their share in the global market. In the gems & jewellery sector, global imports in the last five years through 2020 grew by CAGR of 5%, while India’s exports contracted by a CAGR of 12%.
Similarly, while the woven garment imports worldwide remained static during 2016-2020, India’s supplies shrank by a CAGR of 8%. In the leather footwear sector, in which global imports grew by a CAGR of 1% during 2016-2020, the country’s exports contracted at a CAGR of 7%.
However, in certain farm commodities, such as coffee, tea, spices, preparation of meat & fish, preparation of foods & vegetables, India’s CAGR in exports has been more than the double that of global imports between 2016 and 2020. Here the country needs to build upon what it has achieved in recent years.