HOW THE NUMBERS STACK UP
India’s trade with Japan fell 16% in four years from 2013-14, mostly on account of falling petro demand and prices
Visiting for the second time in the National Democratic Alliance government tenure, Japanese Prime Minister Shinzo Abe signed 15 agreements with India, panning skill development, science, technology and even sports.
Though the India-Japan joint statement mentioned “enhancing free, fair and open trade”, the industry-specific trade developments will take time to fructify. India’s trade with Japan fell 16 per cent in four years from 2013-14 to 2016-17, mostly on account of falling petroleum demand and prices.
Here, we take a look at India’s major imports and exports with Japan in recent years.
Petroleum products like liquid paraffin, mineral oils and transformer oils form the highest exported component (at the 8-digit HS code level), but their exports to Japan have bottomed over the years, from more than a third of total exports at $2.4 billion to $70 million. By and large, this can be attributed to fallen oil prices and reduced demand from advanced economies, including Japan. Product Naphtha, oil for lighting, human (external) use Mineral oils, liquid paraffin, transformer oil Frozen shrimps Soymeal $million Japan 2013-14 2014-15 2015-16 2016-17 share in % PVC and allied materials Gear box, auto transmission systems, couplings Used oil tanker vessels Ships and spare parts 135.11 2,418.16 9.38 111.78 2.46 348.34 156.93 1,173.51 34.14 150.16 28.54 343.01 325.11 293.98 144.71 196.95 18.41 319.83 284.15 70.81 169.72 243.5 110.28 179
Shrimps, a staple item in the Japanese diet, topped India’s exports to Japan in 2016-17. Export of frozen shrimps shot up from $20 million to $284 million in three years. Short supply from South East Asian countries on account of disease, and improved production and quality of the Vannamei variety of Indian shrimp catapulted this spike, said an industry expert who did not wish to be named.
Gear boxes formed the biggest imported item from Japan in FY17, valued at $243 million, doubling in three years.
But the imported product that raised eyebrows was polyvinyl chloride, or PVC. PVC is a wellknown common polymer used in variety of applications ranging from pipes, cables, greenhouses, construction activities, etc. Due to poor capacity addition in terms of domestic production in the last 15 years, India’s reliance on imports has increased, and that on Japanese imports, more so.
“PVC manufacturing is a difficult process with regard to handling raw material. But its consumption across a wide array of industries warrants acceleration in domestic production on urgent basis,” Singh from CPMA added.