India China Trade: Exporters ready to push the limit Project
exporters ready to push the limit
According to the Federation of Indian Export Organisations (FIEO), increasing market access to China is vital for a quantum jump in India’s exports. A total bilateral trade of US$ 100 billion between India and China by 2015, along with projected exports worth US$ 40 billion will narrow the trade deficit with China.
We are aiming for double-digit growth in exports to keep trade defieits within manageable limit.”
M Rafeeque Ahmed President, Fieo
Atrue reflection of the exponential growth in bilateral trade of the two countries, from just US$ 7.6 billion in 2003 to US$ 66 billion last year; China is emerging as one of India’s largest trade partners. The two-way trade between India and China is expected to touch $100 billion by 2015, a 50.6 per cent higher than $66.4 billion recorded in 2012-13.
Welcoming the recent statement of the Prime Minister of India on the economic cooperation with China, M Rafeeque
Ahmed, President, FIEO said that increasing market access to China is vital as the country is endeavoring to change its export profile to China; from raw material to finished and value-added products. “Presently, market access is restricted for pharmaceutical, agro products and IT services. This should be looked into by China so as to provide an impetus to India’s exports in these areas. While bilateral trade of US$ 100 billion by 2015 is within the realm of reality, I would like India’s exports to touch US$ 40 billion by 2015 so as to bring trade,” he stressed.
The FIEO president also welcomed the proposal of Chinese investment in manufacturing sector, which will be a win-win situation for both the countries as China is losing its competitive edge in manufacturing, which will further accentuate with growing population. On the other hand, India will be benefited with technology transference and work-culture, and the move will help in increasing the
manufacturing share in country’s GDP, a basic objective of new Manufacturing Policy. Linking of India’s North East Region with Bangladesh, Myanmar, China and other South-East Asian regions will strengthen India’s economic linkage with these countries.
“With growth in bilateral trade and India and China pursuing partnerships, business plans, and stronger ties with each other, these two Asian giants are expected to dominate world trade and economy in the coming years,” observed Ahmed.
Commenting on the recent initiatives by FIEO regarding the strengthening of trade with China, Ajay Sahai, DG and CEO, FIEO informed CargoTalk that the Federation has been focussing on this important market, with frequent and large participation of Indian businessmen in important international exhibitions like Canton and SACTF (South Asian Countries Trade Fair) over the last few years. FIEO had organised four consecutive participations earlier in the SACTF, Kunming, which has now been upgraded to the 1st China South Asia Expo, Kunming scheduled in June 6-10, 2013. At this show, the exposure to MSME segment helped Indian exporters in their marketing effort as well as product development. The delegation comprised of around 90 Indian companies in 128 booths, exhibiting a wide range of products such as wellness products, jewellery, electronic items, textiles and
At the present, half of the country’s exports are to Asian countries”
Ajay Sahai dG and ceo, Fieo
garments, woollens, processed food, gifts and promotional items, handicrafts, metal ware, kitchenware, home furnishings, leather footwear and wooden furniture.
Indications for fy 2013-14
According to the FIEO Chief, the new financial year has started on a positive note and Indian exporters look forward to build on it. “We are aiming for double-digit growth in exports to keep trade deficits within manageable limit,” observed Ahmed.
He further shared that that focus on emerging economies like Indonesia, Vietnam, Columbia, Saudi Arabia, South Africa and some other emerging countries would help in a quantum jump in exports.
“The rise in gold imports is a cause of concern, but the softening in gold prices is good news and will help in reducing imports value-wise. But there is a need to evaluate rising volume-wise gold imports,” he maintained.
He however, cautioned that the export figures for May are indicative of the fact that the global recovery is still weak. The global growth has been uneven. “We have seen few green shoots in countries like USA and Japan, but the European area continues to be a cause of concern,” he pointed out. Even in
some large emerging economies like China, Brazil, Russia and South Africa, sluggish external demand and lack of investment are pulling down economy activity.
It may be recalled that for FY 2012-13, FIEO had set an export target of US$ 350 billion. However, the exporters reached US$ 301 billion. For FY 2013-14, they have set a modest target of US$ 375 billion. “In the FY 2012-13, we Indian exporters face several challenges because of the overall slump in the international market, even in the Asian countries (0.4 per cent down compared to previous FY). At present, half of India’s exports are to Asian countries,” Sahai pointed out. He, however, was confident that the target set for the current FY is achievable due to recent innovations by Indian exporters and positive initiatives by the government, like new MDA scheme, FTA initiatives and exploring new markets. Sahai also emphasised on cost-competitiveness and efficient SCM to penetrate emerging markets like ASEAN (especially Indonesia) and BRICS countries. “E-commerce is another important segment that Indian exporters need to focus on,” he added.