India’s merchandise exports have undergone a major shift in recent years. The change has been rather silent except for the occasional buzz about export of iPhones. But it is not just about Apple’s flagship product. India’s share in the global export of machinery, phones, automobiles and petroleum has grown significantly between 2015 and 2022. Meanwhile, there has been a marked decline in India’s share in its traditional export items such as gems and jewellery, apparel, meat and leather articles. Exports of textiles, clothing and made-ups, for instance, fell by about 17% y-o-y in FY2023.
Is this change temporary or will this be a permanent feature of our trade order?
An analysis of the data by Delhi-based trade think tank Global Trade Research Initiative (GTRI) shows India’s exports in the category called electronics, telecom, mobile phone etc., jumped from $7.9 bn in 2015 to $26.6 bn in 2022 — from 0.41% share of world market to 0.71%, a 73% rise. In machinery, India’s global market share rose from 0.75% to 1.05%, a growth of 40%.
The analysis for the same period lists other performing sectors such as petroleum (share in global trade went up from 1.87% in 2015 to 2.45% in 2022) and automobile and its components (from 1.11% to 1.32%).
All figures pertain to calendar year.
India’s share in world merchandise export in 2022 was 1.8%. If services exports are also added, the share would go up to 2.4%. The figure is still low when compared with India’s 3% contribution to the global market cap or 3.4% share of global gross domestic product (GDP). In FY23, India’s merchandise export was $447 bn, registering a 6% rise YoY. If goods and services are combined, total exports ($770 bn in FY23) registered a healthy 13.4% rise.
Meanwhile, among Indian merchandise export products, which lost glob- al market share in recent years, gems and jewellery’s down- swing has been staggering. Its share dropped from 7.4% in 2015 to 4.7% in 2022, a fall of 36% in seven years, according to GTRI’s analysis. Exports of apparel (-19%), meat (-48%) and leather (-20%) showed substantial drops in the global market. As far as pharmaceuticals are concerned, exports rose but their share in the global market dwindled.
Losing the sheen
While acknowledging that the shrinking of India’s share in total gems and jewellery export has been a matter of concern, Colin Shah, MD of Kama Jewellery, tells ET that passing the Development of Enterprise and Service Hubs (DESH) Bill, now pending in Lok Sabha, is essential to get big foreign jewellers to invest in India.
“Big jewellers have been moving to countries such as China, Vietnam, Indonesia and, in particular, Thailand. But they are hesitant to invest in India. Also, India has to sign several more free trade agreements (FTAs) like the one signed with the United Arab Emirates. Only then will the sector be far more competitive,” says Shah, a former chairman of the Gem & Jewellery Export Promotion Council. DESH Bill is aimed at changing the laws under the Special Economic Zone (SEZ) Act of 2005, and making them more industry-friendly.
Read more at:https://economictimes.indiatimes.com/news/economy/foreign-trade/indias-exporting-more-phones-and-cars-while-jewellery-and-textiles-take-a-backseat-is-this-a-temporary-change-or-a-permanent-feature/articleshow/101421143.cms
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