India needs a unique approach to capture market, President

Aamir H Kaki

The Federation of Indian Export Organisation’s (FIEO) golden jubilee celebrations were held at Vigyan Bhavan on Wednesday, with the President as its Chief Guest. Speaking on the occasion the President gave his opinion on various export related issues that India could achieve in the coming years. He touched upon domestic and international export policy trends, market strategies, quality control standards, port-led development, the Indian economy and its positive growth rate in the world.

It was invigorating as well as enlightening to hear the President extolling several sectors and the steps needed to reform those that were yet to meet their mark. Innovation is the key to success. Stressing on the same the President said that our needs to be innovative in its approach to capture markets with its customised products.

“The export sector is dynamic and affected by changes in policy both at the domestic and international level. We, therefore, need to be innovative in our approach to capture markets with customised products in today’s highly competitive world.” He also said, with the volume of world trade remaining sluggish in 2016, India needs to devise cohesive strategies of retaining its market share first and then increasing it.

Touching upon marketing strategies, he stressed the importance of quality and quality control standards that Indian products need to follow to create a sustainable demand for them abroad.

The President emphasised that the country needs to focus on other crucial drivers of growth such as infrastructure, human capital, simplification of rules and regulations, and improved access to finance. Since the micro, small and medium enterprises sector play an important role in the Indian economy, in generating employment and adding to the export volumes, it is necessary that these sectors are provided with unique procedures and banking solutions to help them.

Suggesting measures to enhance exports, the President said that efficient logistics is crucial to competitive exports. “Around 95 percent of India’s trade by volume and 68 percent in terms of value are transported by sea. Therefore, it is important for the exporting sector to have access to port facilities of international standards and better connectivity with the hinterland in order to reduce turnaround times.”

Throwing light on the recent steps taken by the Government with regard to port-led development, he said, that the Government has taken measures to promote the same through the Sagarmala Project and integrating the ports in the Project with Special Economic Zones (SEZ), Industrial Parks, Warehouses, Logistics Parks and Transport Corridors.

With major economies globally witnessing slow growth rate, India is enjoying the highest growth rate. “India’s GDP growth is 7.6 percent and it is projected to be 7.7 percent and 7.9 percent in the coming years. We need not feel disadvantaged because today, India is enjoying the highest growth rate in the major economies of the world,” Mukherjee continued, “And, this growth momentum is definitely sending strong positive signals.”

He is of the opinion that several other macro-economic parameters clearly show the strength of the Indian economy. For example, food inflation is highly contained due to substantial supply management. Industrial sector, though under stress in the face of weak global and domestic demand, is showing some signs of recovery with a 2 percent growth in February this year.

He further said that the government is firmly committed to a healthy fiscal management. “The fiscal deficit for 2015-16 was maintained at the budgeted level of 3.9 percent. By targeting 3.5 percent for 2016-17, we are on course to achieve fiscal consolidation,” he said.

“I am confident we would fully realise the growth potential of our economy,” the President added. The global economic slowdown, has brought down demand and has affected India’s exports. “It is a matter of some concern that our exports have been continuously decreasing since December 2014. Indian merchandise exports, recorded at $261 billion in 2015-16, constitute a decline of over 15 percent,” the President said. “The Indian service exports were comparatively better, perhaps because of a recovery in our traditional export markets such as the USA,” he added.

Mukherjee said that while the export sector remained bleak, there was some comfort brought about by the falling commodity prices globally. With a dwindling import bill, it resulted in a healthy current account deficit of 1.4 percent of GDP in the first three quarters of 2015-16. However, he cautioned, we must be concerned with the volume of trade taking place as falling trade levels impact the economy, industrial growth and employment levels.

The President congratulated the FIEO for completing 50 years and all the award winners for their contribution to the economy. “I am sure that the export sector will continue to contribute handsomely to the balanced socio-economic development of our country,” he concluded.

The Minister of State for Commerce & Industry Nirmala Sitharaman and the Commerce Secretary also complimented FIEO for its 50 years in serving the trade industry.

Sounding positive on the turn of export trends the minister remarked, “Exports play an important role in the economy, especially in generating employment. I think that the worst is over for exports and they are improving now. Industry and government need to work together and recognise new markets for exports.