India’s exports grew slower than the global imports in the last five years. Many of the labour intensive sectors have lost global market share, while several others that gained, performed below their growth potential, an analysis carried out by the Federation of Indian Export Organisations (FIEO) shows.
The FIEO study, based on UN Comtrade data for 2016-20 indicates that while global imports grew at a Compound Annual Growth Rate (CAGR) of 3 per cent during the period, Indian exports grew only 2 per cent. The COVID-19 lockdown in 2020 was the major factor that pulled down India’s growth, though it applies to global imports as well.
On the performance of key labour intensive sectors, the FIEO analysis showed that in the Gem & Jewellery sector, against a 5 per cent CAGR growth of global imports, India’s exports, during the same period, contracted by a CAGR of 12 per cent. Similarly, the woven garment imports globally remained static during 2016-2020, while India’s export of woven garments contracted by a CAGR of 8 per cent. In knitted garments, global imports remained stagnant whereas India’s exports of knitted garments contracted by 6 per cent. In the leather footwear sector, global imports grew by a CAGR of 1 per cent during 2016-20 while Indian exports contracted at a CAGR of 7 per cent. Global imports remained static in the case of products like saddlery, leather bags, purses, belts, also, but India’s exports of such products contracted by a CAGR of 4 per cent.
The sports goods and toys segment, and furniture and beddings — both labour intensive sectors — bucked the trend. While the global imports witnessed a CAGR of 3 per cent in the case of toys and sports goods during 2016-20, India’s exports clocked a CAGR of 9 per cent. In furniture and beddings, while the global imports witnessed a CAGR of 2 per cent during 2016-20, India’s exports clocked a CAGR of 9 per cent. India’s presence in the global toy and sports goods market though, is miniscule, at less than 0.35 percent, FIEO analysis revealed.
The data also showed that sectors like mechanical machinery, electrical and electronics, medical and surgical equipment, several agricultural products, etc. have done extremely well in terms of export growth during the last five years. However India’s share in global imports in these sectors is too low, indicating the growth potential. For instance, the Mechanical Machinery and Parts thereof showed a CAGR of 3 per cent in global imports during 2016-20 while India’s exports of these products grew by a CAGR of 8 per cent in the same period. In terms of market share, it was less than 1 per cent as India’s exports stood at $18 billion in 2020, as against a global market size of over $2,142 billion.
Source: Business Today