It's not surprising that India's exports to the Latin America region have increased manifolds in the last couple of years. Going by official figures, exports from the country to the region increased from USD 2.16 billion in 2004-05 to USD 6.01 billion in 2008-2009. This is an astounding growth of 178 percent. Meanwhile, exports to the LAC region have increased by 108 percent to USD 5 billion in April-September 2010 compared to the same period in 2009.
Considering this robust growth, I strongly feel that there is need for a shift in export from the northern hemisphere to the southern hemisphere - to Latin American Countries (LAC). Exporters should understand that in the near future developed nations would show an import growth of around 0.9-1 percent, while developing economies like those in LAC would exhibit an import growth between 4.5 and 5 percent - a good news for us. And what's more...the government too is supporting and encouraging exporters to explore new markets of the region.
If you are wondering what to export, here are some tips. Three product groups - textiles, engineering products and chemical products constitute the bulk of of India's exports to the region. In the textiles sector, ready-made garments, made-ups, fabrics, yarn, carpets, handicrafts, etc. are high on demand in the region. In the engineering sector, automobiles, auto components, electrical appliances, machinery, computer software, etc. have good scope for exports. Bulk drugs, pharmaceuticals, dyes and intermediates, agro-chemicals, plastic products, naphtha, resins, essential oils, molasses, tyres for buses, trucks and cycles are the other items which have great demand in the LAC region.
It think the biggest advantage for our exporters exporting to this region is that they stand to get good margins there. Moreover, exporters can take advantage of the 3 percent incentive on FOB value of exports of products exported to the region. I strongly feel that diversification of the export basket and exploring new markets will be the key to survival in the coming years. The question is are you ready?
|
