Exports To Oecd And Asean Decline: Ficci

India's exports to Organisation of Economic Cooperation and Development (OECD) countries and Asean countries have witnessed a steady decline during the last five years, according to a study conducted by the Federation of Indian Chambers of Commerce and Industry (Ficci).

The two are major export markets for India. OECD constitutes 56 per cent and Asean nine per cent of the total Indian exports.

The rate of penetration of Indian goods in dollar terms came down to 8.2 per cent during 1996-97 (April-February), as compared to 12.8 per cent during the corresponding period in previous year in OECD countries, the study reveals.

 

The data on export growth between 1991-92 and 1996-97 had also been taken into account.

In rupees terms, between 1993-94 and 1995-96, exports growth to OECD countries remained stable at 22 per cent. But a drastic fall took place in 1996-97 (April-February) when growth rate plummeted to 12.9 per cent, the study says.

In case of Asean, the fall has been more drastic. In dollar terms, Indian exports to Asean countries came down to 10.6 per cent in 1996-97 from 53.4 per cent in 1995-96, it says.

In rupee terms, slide down was 15.4 per cent in 1996-97 from 49.1 per cent in 1995-96.

According to Ficci survey the most important reason for slow down was sluggishness in international trade. The global imports declined from 19.5 per cent in 1995 to a mere four per cent in 1996.

The world trade during 1996 declined in almost all the regions compared to 1995. In case of Western Europe, the slow down was very pronounced. It fell from 22.5 per cent in 1995 to a mere three per cent in 1996.

In case of eastern tigers, the slow down was from 23 per cent in 1995 to three per cent in 1996, the study says.

Besides global slow down in imports, non-tariff restrictions had also come in the way of exports of many countries particularly those of the developed world.

According to Ficci, indiscriminate use of anti-dumping measures came into the way of India's exports especially in items like textiles, steel pipes, wire ropes and certain chemical products.

Anti-dumping duties on Indian textiles in European Union range between 15 to 20 per cent and in some cases even more. Bicycles have also been identified for imposing anti-dumping duty.

The European Union has already restricted entry of several Malaysian and Indonesian bicycle parts.

It is understood that Indian products would also shortly be subjected to restrictive measures.

According to the survey more and more quantitative restrictions are being imposed by the developed countries. Countries like Canada maintain import licensing requirement for a variety of food and agricultural products.

The phasing out of quota system imposed by developed countries have been unduly delayed. Woollen garments in United States and several textile materials in European Union are cases to point.

Restrictions put by multinationals in their foreign collaboration agreements to avoid competition with the same MNCs in those markets also affected Indian exports adversely.

Reduction in tariff and subsidies particularly in relation to agri-products is not taking place in conformity with Uruguay round of agreements. Subsidy on sugar in many of the OECD countries is reported to be as high as 48 per cent.

Keeping a large number of products outside the multi-fibre agreement (MFA) such as cotton, pure silk, hand-made carpets and synthetic fibres also added to woes of exporters.

Besides high cost of finance, erratic power supply and high tariff have also come in the way of export planning and execution.

The survey suggests that the fuel oil should be provided to captive power plants at the international price.

To achieve the targeted 20 per cent growth rate, foreign investment at a much higher level should be allowed in export sector.