Is Global crisis the only

reason for India’s

Export Decline
By: Vivek Chachra
Pratul Kansal
Neha Kumar
Abhishek Singh
Vaibhav Gupta
Nidhi Khanna
Sandeep Khandelwal
 According to Sakthivel,
President FIEO
The Current Export Scenario:

• World Trade Is heading toward

negative zone
• India’s exports are decreasing
• Unable to meet the price targets –
Indian Exporters
• Manufacturers not able to meet cost
competitiveness.
• Indian exports are facing tough
competition
–other countries having
advantage(exchange rates)

• Cost of Credit in India is higher by

5%- 7% than other countries.

• Further erosion by stimulus packages

announced by the Indian
Counterparts.
• Indian Cost of labor is 30-35% higher
than other Asian countries
• Import Tariff on Textile raw material
is lesser in comparison to India.
• India does not enjoy higher tax
rebates (no cost cutting)
• India’s Failure to give low value
items like synthetic fabrics and
garments whose main exporters are
China and Bangladesh.
• Pharmaceutical exports suffered because
inventory was reduced to 15 Days.

• India’s textile exports suffered as demand

dried up for high value garments.

• All this made exports costlier by 25%. The

new govt. Should focus on fundamental
issues of exports.
 Business Strategies by
Global Players
Global Retailers have latched on to a
new system of placing orders- the
focus is on global tendering which is
taking a toll on Indian exporters.
According to KT CHACKO
• Indian exports registered a marginal
annual growth of 3-4% in 2008-2009.

• The main reason for decline in exports

for every country is product diversity.

• Vietnam – has limited product diversity

in exports and it warded off the global
crises via low income elasticity of
demand for exported products.
• For India this adverse impact is more
visible in sectors like
Tea, gem and jewellery (-6.9%) (Sri
lanka)
Handicrafts (-42.7%)
Carpets (-7.9%)
Cotton and Raw waste (-68%)
 Reasons
• India’s exports promotion policy lacks
cohesive and comprehensive approach.

• Strong and diversified exports growth

coupled with inflows through FDI.

• Multiplicity of agencies, Complex and

User unfriendly procedures makes
exports expensive.

• Poor Productivity compared to Asian

Countries
• Business Strategies Philippines –
One stop documentation center.
E-enabled governance of trade
related authorities.
• Heavy transaction cost have limited
the capability of Indian exporters.
• Many exporters as a result have
moved other sectors like reality.
Thank You!