India eyes new export mkts amid geopolitical conflicts
Electronics, drugs, engineering goods and food products to be exported to new destinations
4.87
The commerce ministry is working on a plan to diversify its export destinations, and ship items such as electronic goods, drugs, engineering goods, and food products to new markets, as trade with India's traditional partners such as the US and Europe declines amid geopolitical realignment prompted by regional conflicts.
The government sees significant export potential in regions such as Saudi Arabia, France, Vietnam, the Netherlands, Mexico, and Ethiopia, two people aware of the development said.
The goods identified for export to absolutely new markets include iron ore, engineering goods, drugs and pharmaceuticals, electronics items, agricultural and processed food.
The initiative is part of the government's strategy to broaden the export range from traditional food commodities to include alcoholic beverages, ready-to-eat foods, confectionery, and value-added products such as those made of banana and jackfruit.
This approach involves market research to identify the most suitable products for each destination, considering factors such as market trends, competition, and regulatory requirements, they said.
The commerce ministry has decided to target France, Saudi Arabia, and Kenya to push export of iron ore. Currently, iron ore is mainly exported to China, Indonesia, Malaysia, Korea, and the Netherlands, the first of the two persons cited earlier said.
As per commerce ministry data, export of iron ore to Europe fell 78% to $50 million in FY24. Overall exports of iron ore, however, rose 117% over FY23 to $3.91 billion in FY24.
For engineering goods, India has identified new markets such as Sao Tome, Macao, Georgia, Croatia, Guineabissau, Belize, Azerbaijan, Myanmar, Lithuania, Norway, Somalia, the US, and Greece, the first person said.
The Netherlands, South Korea, Belgium, Mexico, Japan and Kuwait have been identified as promising markets.
Currently, engineering goods are mainly exported to the US, UAE, Saudi Arabia, Germany and Italy.
The exports of engineering goods to Europe remained unchanged in FY24, standing at $27 billion. Similarly, for drugs and pharmaceuticals, Montenegro, South Sudan, Chad, Comoros, Brunei, Latvia, Ireland, Sweden, Haiti and
Ethiopia have been identified as new markets, and Greece as a promising market.
Traditional markets for pharma are the US, the UK, the Netherlands, South Africa and Brazil.
For electronics goods, the Centre has identified Sao Tome, Montenegro, Cayman Islands, St. Vincent, Mongolia, EL Salvador, Turkmenistan, Honduras, Bahrain, Somalia, Puerto Rico, Vietnam and Sweden as new market destinations, while Russia, Mexico and Turkey are listed in the category of promising markets.
To push the export of agricultural and processed food products, the government has identified specific territories for focused strategy and outreach, and includes Nigeria, Switzerland, Lithuania, Slovenia, Mexico, Sweden, Portugal,
Cameroon, Djibouti, Latvia, Egypt, Senegal, Canada, Argentina, and Brazil.
The export of agricultural and processed food products stood at $21.6 billion in the 11 months till February 2024, which is lower than the previous year's exports worth $23 billion for the corresponding period.
India’s goods trade deficit narrowed by nearly 17% in March compared with the previous month, while exports rose only marginally. However, India’s agricultural export recorded a marginal increase of 2.5% to $33.24 billion in FY24 from $32.43 billion in the previous fiscal
The trade deficit fell to $15.6 billion in March, down from $18.71 billion in February, and $16.02 billion in January, commerce ministry data showed.
This is the lowest it's been in 11 months—the last time the deficit was narrower was in April 2023 when it came in at $14.44 billion.
“This tactical shift in export strategy will encourage farmers to diversify their crops from conventional crops to cash crops, ultimately increasing the presence of processed food products in global markets.
“This shift is expected to lead to an increase in farmers' income,” said Rakesh Arrawatia, professor of finance and accounting at Institute of Rural Management, Anand. It will also help address our exportimport imbalances, he said.
The commerce ministry is also working on policylevel intervention to strengthen its ties with the processed food industry through Agricultural and Processed Food Products Export Development Authority (Apeda).
Queries emailed to commerce secretary, Apeda chairman and spokesperson of commerce ministry remained unanswered till press time.