India's Export Growth Shows New Delhi Gradually Shifting Away From The US Market

The global exports market is valued at US$ 800 billion, of which the US accounts for less than US$ 120 billion. The European Union is a bigger market with more than US$ 230 billion in value terms. Argentina, Japan, Hong Kong and several countries in Africa have emerged as strong alternatives to the US market.

In November, India managed to push exports in almost all key sectors, including textiles. Last week, India signed the much-awaited Comprehensive Economic Partnership Agreement (CEPA).

While sources said that multiple free trade agreements (FTAs) have helped exporters, they also said that a share of goods may be getting redirected to the US from other countries.   

“We are not overtly concerned about the US market; the focus now is to tap the untapped markets worldwide,” Union Textiles Minister Giriraj Singh told The Secretariat in an exclusive interview.

“The potential for India, therefore, to expand its market is huge, and this has come as an opportunity for us, and we will do whatever it takes to increase the market share,” Singh said.

While many expected that the India-US trade pact would be in place before the year closed, it is now likely to be signed only around March-April next year. The two countries, which set the ambitious Mission 500 to take bilateral trade to US$ 500 billion by 2030 — more than double of what it is today — are, however, continuing with the discussions on the contours of the pact.

“Overall, India’s export sector has shown resilience despite multiple challenges. So once the India-US trade deal is signed, exports will only be further boosted, and this is a positive sign,” Singh said.

According to government statistics, there has been exponential growth in exports to Argentina (73%), Hong Kong (68.9%), Egypt (27%), Nigeria (20.4%), Japan (19%) and Sweden (16.1%).

“We are also looking at aggressively tapping the domestic market, which in itself offers huge scope,” Singh added. The domestic textiles and apparel market is estimated at just under US$ 200 billion at present.

Globally, China and Vietnam, among other nations, lead the textiles and apparel supply. India currently has just about 5% of the global share. Sources said that the government must take urgent steps to ensure that exporters, many of whom can be categorised as micro, small, and medium enterprises (MSMEs) dealing in textiles and apparel, get the required regulatory push to be able to focus on their core businesses.    

Currently, Indian textiles and apparel are a US$ 150 billion-plus industry providing direct employment to over 45 million people and accounting for 14% of India’s industrial production. 

Promoting Exports

The Ministry is trying to position India as a global textiles manufacturing hub by developing a US$ 250 billion Industry and attaining US$ 100 billion in Global Textile Exports by 2030. This is expected to be done by focusing on high-tech & high-growth product segments, leveraging inherent strengths, developing large-scale plug and play infrastructure, keeping sustainability at the core, while ensuring large-scale livelihood opportunities, providing impetus to traditional sectors and becoming Atma-nirbhar in the raw material value chain.  

Strengthening Handloom

Singh also said that the government is making efforts to promote Indian handloom and handicraft growth in the world market. "We are trying to strengthen the entire value chain, from raw material support to technology integration, design interventions, and market linkages," the minister said.

Meanwhile, exporters said that India needs to 'up the game' in maintaining quality of its products to be able to remain competitive in the global market.

“Often the problem that Indian exporters are facing is the issue of quality, a few countries like Japan have brought it to notice and now the next focus for the authorities needs be on quality issues,” a source who is familiar with the development said.