Exports are a critical component of a country’s Gross Domestic Product. Thus, boosting exports is central to achieving higher growth and economic prospects. This assumes greater relevance at a time when the global environment has become increasingly uncertain, given rapidly changing global trade dynamics and an increasing shift towards protectionist policies.
Amidst rising global uncertainties, Indian merchandise exports recently registered a decline of around 1.7%, as they fell from US$82.4 billion during April-June 2018-19 to US$81 billion in April-June 2019-20. Therefore, enhancing exports, with a targeted strategy that identifies and promotes the right products has become an imperative for India.
In the light of these issues, the Confederation of Indian Industry (CII) recently published the research report “Indian Exports: The Next Trajectory – Mapping Products and Destinations”, where it has identified Indian exports with potential and also suggested a host of measures to boost the select products. The markets where these products are expected to have the best outcomes are also identified.
The paper identifies products at the 4-digit HS code level with a dual identification strategy. In the first step, the top imports of the top importing nations are identified, which are then mapped with India’s current export profile for determining India’s export competitiveness to these top importing nations. A total of 31 products are arrived at by adopting a filtration technique that considers criteria such as total exported value of products, world export shares, India’s rank as a top exporter in the top import items and India’s frequency as a top exporter among those top imports.
Products are then further classified into three categories – ‘Achievers’ i.e. products where India is already a leading producer; ‘Aspirers’, where there is significant potential and high export competitiveness; and ‘products where capacities need to be enhanced’ where there is potential but a need to step up global shares and production. The table below presents the focus list of products, classified into the above-mentioned categories.
Focus List of Products
|Achievers||Aspirers||Products where capacities need to be enhanced|
|Jewellery and precious metals (7113)||Tractor accessories and motor vehicles (8708)||Motor cars and motor vehicles (8703)|
|Women’s blouses excluding knitted or crocheted (6206)||Knitted or crocheted T-shirts (6109)||Turbojets, turbo propellers (8411)|
|Refined copper (7403)||Flat-rolled products of iron or non-alloy steel (7208)||Telephone sets (8517)|
|Women’s/girl’s suits, jackets, blazers, dresses (6204)||Cyclic hydrocarbons (2902)||Structures and parts such as bridges etc. (7308)|
|Medicaments pertaining to therapeutics uses (3004)||Heterocyclic compounds (2933)||Motor vehicles for transport of goods (8704)|
|Flat-rolled products of iron or non-alloy steel (7210)||Insulated wire (8544)|
|Polyacetals (3907)||Electrical apparatus (8536)|
|Men’s or boy’s suits (6203)||Articles of plastic (3926)|
|Parts suitable for use solely or principally with internal combustion (8409)|
|Plates, sheets (3920)|
|Parts suitable for use solely or principally with internal combustion piston (8409)|
|Pharmaceutical preparations (3006)|
|Articles for the conveyance or packaging of goods (3923)|
|Furniture and parts thereof (9403)|
|Jerseys, pullovers (6110)|
|Women’s or girls’ suits, ensembles (6104)|
|Jerseys, pullovers (6110)|
Given the findings of the paper and based on the export potential of the identified items, several measures are suggested for enhancing the competitiveness of the select products.
Recommendations are divided into two streams – one that is targeted at expanding the domestic manufacturing of the products and the second is aimed at aggressive marketing of the products in the top destination markets.
Strengthening of industrial clusters is recommended for expanding the domestic manufacturing of products, given that industrial clusters are a well-established means of industrial development. Adoption of an integrated value-chain approach is also recommended as this is critical for establishing global linkages. Facilitating Special Economic Zones (SEZ) and Coastal Economic Zones (CEZ); strengthening trade and investment agreements and standards and certifications; enhancing technology and innovation; and boosting hi-tech exports are some of the other measures suggested in the paper. A key recommendation is the need for developing an identification strategy at the state-level, based on comparative advantage/performance of products.
For enhancing the market promotion of the select products, it is recommended that non-tariff barriers must be taken up with the respective Governments of destination countries. CII strongly recommends the need for developing specific export strategies that target the top importing nations. The strategies must be designed taking into consideration the external environment of the particular export market, where dedicated offices must be set up and tasked with the promotion of identified products. Other suggestions include facilitating effective marketing strategies by setting up centres in top international markets, product promotion and integration of brand building initiatives with India’s commercial missions.