NEW DELHI: India's exports which contribute 17-18 per cent of the country's GDP are highly dependent on the European Union and the US, while,their destination to Africa, and Latin America is dismal, a study by the RBI said.
The country has also not developed much of trade relation with Asia and Oceania, as the countries in this region accounted for only 2.7 per cent of Indian exports in 2008-09.
Africa and Latin America were also lower on the priorities of Indian exporters, as is seen by the RBI study.
According to the study, the entire Latin American region accounted for only 3.5 per cent of India's exports, while consignments to Africa were about 7 per cent of the country's total exports of USD 168 billion in 2008-09.
It was in this backdrop that the new Foreign Trade Policy unveiled on August 27, seeks to promote exports to these countries under the promotional focus market and focus product schemes.
Realising that the government cannot create demand for Indian products in the recession hit markets of the US and western Europe, the policy gave incentive of 2.5-3 per cent on shipments to countries like Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam, Combodia, Australia and New Zealand.
In terms of individual countries the US continues to be the single largest destination for Indian exports. However, China and Singapore are catching up fast, the study said.
Source : The Economic Times