Sectors such as metals, machinery, plastic and marine products may drive India’s export growth in 2018-19 as a diverse set of sectors upstage traditionally strong exchange earners such as gems and jewellery and textiles in the growth charts.
A recently released official statistics reveals that the export spurt in 2017-18, whereby the country managed to achieve more than $300 billion worth of outbound trade after two years, was supported by a consistent annual rise in commodities and finished goods from these sectors.
The tally for total exports stood at a revised $303.66 billion for 2017-18, above the government’s target of $300 billion. In 2016-17, this was $275.85 billion. The near 10 per cent growth was led by an over 113 per cent growth across principal commodity groups where India has not historically enjoyed high export competitiveness. However, these broad sectors represent less than 10 per cent of the export basket individually.
The largest sector within this group, base metals, rose by more than 28 per cent. This is due to a nearly 29 per cent rise in the export of raw iron and steel as well as a significant rise in products higher up the value chain. The other two major commodities in the group, aluminium and copper, also continued to have much higher growth rates than the year before. Exports of every metal apart from nickel have also registered at least a 25 per cent rise.
“The stellar performance of the sector is mainly attributed to the metal pack even as the US remained the top market for us,” Engineering Exports Promotion Council Chairman Ravi Sehgal said. The body said the US continued to be the top destination for India’s engineering products, registering an impressive 44.3 per cent growth in the last fiscal year. Sehgal added that exporters expect more support from the government on the policy level, including faster clearance of tax refunds.
A further break-up of the data shows that the US was also the largest importer of Indian ‘industrial machinery’ for the year under review with 25 per cent year-on-year growth, followed by the UK with a 44 per cent increase in shipments. Bangladesh and Germany were other key markets for Indian industrial machinery.
Experts also point towards sectors such as marine products which continue to see a persistent rise. Comprising mainly of shrimps, prawns and fish; India's aquatic exports stood at $7.38 billion in 2017-18 and have seen three consecutive years of growth. Latching on to this, the government is in the process of preparing by June a comprehensive roadmap to double exports of marine products, Commerce and Industry Minister Suresh Prabhu has said. This will include measures to strengthen aquaculture production in states, potential collaborations, marketing and integration of supply chains, he added.
The government is also focusing on inland fisheries, which have recently made large strides in exports, as a priority area, and is aiming to create a system for all the 13 coastal states to work in sync in order to develop the budding sector, a senior Commerce Ministry official said.
On the other hand, India's edge in traditionally strong labour intensive exports such as textiles and gems and jewellery has waned. The $4.36 billion worth textiles export space grew by a meager 0.75 per cent in 2017-18 after a contraction in 2016-17. India's largest exchange earning sector, the $41.62 billion gems and jewellery exports, also contracted by 4.12 per cent.