Sunday, August 7, 2016

India better than leading export countries in diversification of destinations, competitiveness crucial to generate export volumes: PHD Chamber


India is better placed in the diversification of export destinations as concentration of exports to its top ten export destinations is 51% as compared to top ten leading export countries of World Hong Kong (81%), Japan (70%), Netherlands (68%), Republic of Korea (67%), UK (65%), USA (63%), Germany (60%), China (59%), France (59%) and Italy (57%), said an analysis conducted by PHD research Bureau of PHD Chamber of Commerce and Industry.

More the percentage is that country is highly exporting to few destinations and lesser the percentage is country is more diversified to a large number of export destinations.  

Notwithstanding the excellent diversification of export markets, cost of credit, volatile exchange rate, poor logistics and export infrastructure impede competitiveness and increase in export volumes, said Dr. Mahesh Gupta, President, PHD Chamber of Commerce and Industry

The top 10 exporting economies across the world are China, USA, Germany, Japan, France, Republic of Korea, Hong Kong, Netherlands, UK and Italy. 

The share of the top ten leading exporters in total world exports is estimated at around 55% of China contributes highest at 14% followed by USA (9,2%), Germany (8.2%), Japan (3.8%), France (3.5%), Republic of Korea (3.2%), Hong Kong (3.1%), Netherlands (2.9%)and Italy (2.8%), said the analysis conducted by Research Bureau of PHD Chamber.

However, all the leading export countries posted a negative growth in 2015 except France.  

Export growth was negative in Netherlands (-17%), Italy (-13%), Germany (-11%), UK (-9%), Republic of Korea (-8%), USA (-7%), Hong Kong (-5%), China (-3%) and positive in France at (1%).

However, India stands 19th in the list of exporters (worldwide) with merchandise exports valued at US $264.38 billion. India’s share in World exports is estimated at 1.6% in the year 2015.

Going ahead, there is lot of potential for India to enhance its exports as 7 out of the top 10 export destinations of India such as USA, UAE, Hong Kong, China, UK, Singapore and Germany are also among the top ten export destinations of leading World exporters.

As these destinations are already in focus of our exporters, the need of the hour is to enhance our competitiveness to increase our volumes of exports, said Dr. Mahesh Gupta.  

Cost of credit is crucial to export competitiveness; the interest rate environment needs to be rationalized to increase the competitiveness of our exporters, he said

As MSME sector contributes around 40% in our exports, easy access to finance for the MSMEs sector is critical to revive the exports growth trajectory, to develop the strong manufacturing base and job creation. 

However, the MSMEs sector is finding very difficult to survive and attract fresh investments because of high interest rate environment since the last many years though the rate of inflation has come down drastically, said Dr. Gupta


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