Exporters have raised concerns with the government about slow growth of labour-intensive exports such as garments, gems and jewellery, marine products, and plastics, over the past few years, compared to Bangladesh, China, and Vietnam.
India's goods exports contracted for the seventh straight month in August though the extent of decline narrowed to 6.86% from double-digit contractions in recent months, to hit a three-month high of $34.5 billion.
As per an analysis by the Federation of Indian Export Organisations (FIEO), the "most pressing concern" regarding the negative export growth is the poor performance of labour-intensive sectors. "An analysis of sector wise export performance for the last five years reveal the troubling pattern that India is experiencing a decline in global market share across labour-intensive sectors."
As per the analysis, the compound annual growth rate (CAGR) of export of woven garments by India in 2018-22 was 1.12%, lower than the global trade growth rate of approximately 2%, with Bangladesh and Vietnam growing at 6% and 4%, respectively.
India being the second-largest supplier of Made-ups after China clocked a growth rate of 3.53% as against the global growth of 9%, FIEO said. In the footwear sector, Bangladesh grew to $1.7 billion from $1 billion over three years in contrast with India's growth to $3 billion from around $2.8 billion, according to the analysis.
However, export performance by technology-driven sectors indicated a significant surge in global demand for machinery, auto components, electrical and electronics goods.
People in the know said there is a possibility that goods export this year may be similar to last year. India's merchandise exports were $453 billion in FY23.
The exporters' body cautioned about the rise in India's overall exports to a "distinct spike" in export growth of roughly $40 billion and attributed the surge to "a rerouting of crude oil trade routes via India to Europe." This may not be sustainable in the coming years, it added.
Source Name : Economic Times