India’s exports are better placed in terms of product diversification as top ten export products account for 58 per cent of total shipments, says a study. The study by an industry body analysed concentration of top 10 export products for major economies, including Hong Kong (89 per cent), Republic of Korea (86 per cent), Japan (77 per cent), the UK (71 per cent), Germany (70 per cent), the USA (68 per cent), China (68 per cent), Netherlands (63 per cent) and France (60 per cent).
Higher the percentage of the country, the more it is concentrated to exports of few products and lesser the percentage of the country, the more diversified it is in terms of export diversification of its products. India has consistently diversified its export products as concentration of top ten export products was 60 per cent in 2010 and 58 per cent in 2015, noted the analysis conducted by PHD Chamber of Commerce.
However, notwithstanding the diversification of export products, India’s export growth trajectory has showed lacklustre performance due to slowdown in demand in the destination countries. “Although things are improving in logistics and export infrastructure front, the cost of credit to exporters is still high as compared to its competitors in the international market,” PHD Chamber of Commerce and Industry President Mahesh Gupta said.
As world economy witnessed slowdown in demand, all top export countries posted negative growth in 2015 except France. In Netherlands export growth was (-17 per cent), Italy (-13 per cent), Germany (-11 per cent), the UK (-9 per cent), Republic of Korea (-8 per cent), the USA (-7 per cent), Hong Kong (-5 per cent), China (-3 per cent) but positive in France at (1 per cent), the study pointed out.
India stands 19th in the list of exporters with merchandise exports valued at USD 262 billion. India’s share in exports is estimated at 1.6 per cent with a growth rate of (-)15.5 per cent in 2015-16, the analysis noted. “Further, a ray of hope is emerging with decent efforts undertaken by the government in improving the ease of doing business and reforms in export infrastructure,” Gupta said.
With the continuous reforms, exports showed a positive growth of 1.27 per cent in June and hopefully one can anticipate an incremental growth scenario in the coming months too, he added. Going ahead, there is lot of potential for India to enhance its exports as seven out of the top ten export destinations of India such as the USA, the UAE, Hong Kong, China, the UK, Singapore and Germany are also among top 10 export destinations of leading exporters, the study observed.
“As these destinations are already in focus of our exporters, the need of the hour is to enhance our competitiveness in terms of reduced costs of capital and improved exports logistics to increase our volumes of exports,” said Gupta. “Going ahead, the continuous pace of reforms at domestic front and recovery in the international market would help India to remain in positive exports growth trajectory in the coming months,” he added.