The Hindu Business Line : Exports shift to more reliable Asian markets

THE big news on the export front is that over the past 50 years, India has been steadily reducing its reliance on unreliable markets. Exports to the European Union, the US and Japan have been steadily coming down. The decline has not been smooth. With chancy markets, the descent has been jerky.

A greater portion of Indian exports is now being channelled towards Iran and West Asia, and other developing countries across Asia that have proved themselves to be reliable trade partners and capable of supporting steady long-term growth.

There is, however, still a long way to go.

Wild-card exports still accounted for two-fifths of total exports in 2003-04, as shown in the accompanying table.

India's exports to the EU stood at 18.4 per cent and 21.6 per cent in the years 1970-71 and 1980-81, and between 21 per cent and 23 per cent annually from 2000 to 2004..

Exports to the US accounted for 13.5 per cent and 11.1 per cent in 1970-71 and 1980-81, respectively. During the period from 2000-01 to 2002-3, they hovered around 20 per cent. As for Japan, the figures for 1970-71 and 1980-81 are 13.3 per cent and 8.9 per cent, respectively, and thereafter, between 3 per cent and 4 per cent. Exports to other Asian countries have been steadily increasing decade after decade with hardly a hiccup.

To appreciate the full significance of the shift in favour of steady trade partners on the export front, one must bear in mind that trade volumes have gone up a great deal; from a mere Rs 642 crore in 1960-61 to Rs 2,93,000 crore in 2003-04. Even small changes in percentage terms, therefore, impact us in a rather big way.

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Exports shift to more reliable Asian markets