India's EXIM performance has closed at seven per cent during the first half
of 2017 down from eleven per cent last year according to the analysis by the
leading Global Container Shipping firm Maersk. India’s global EX-IM climate in
the first six months of 2017 has been affected by slower exports as well as
slower imports—8 per cent and 6 per cent, respectively, compared to 11 per cent
in the first half of 2016.
Whereas in terms of overall growth, we did see a slowdown in the first half
of the year due to all the policy changes, looking at the way the situation is
turning now with the effects of demonetisation and GST wearing off, I am
confident that the second half of 2017 will deliver strong trade growth for the
geography," explained Mr Steve Felder, the recently-appointed Managing
Director for Maersk Line - India, Sri Lanka, Bangladesh, Nepal, Bhutan and
While India’s trade growth with the world is subdued, its position among
the BRICS nations is heightened, as its ex-im growth has pushed it ahead of
China to lead global trade for the BRICS nations, and enabled them to outpace
the global average. The five BRICS partners together contribute nearly
one-quarter of global economic output and half of world economic growth.
With respect to trade among the five BRICS countries though, China
continues to play the more dominant role, more so as India’s exports with these
alliance partners saw a reduction to 3 per cent.
"Though I’m still new to the geography, I can’t help but get excited
about the potential India has to offer when I look at it in macro terms. Be it
growing consumer spends, brands increasingly catering to the world from India,
or infrastructure improvements, I believe India is in a position of great
advantage when it comes to global trade. And its lead amongst the BRICS
countries in worldwide trade is a testament to this", said Mr Felder.
A 202 per cent growth in exports to Sri Lanka helped India maintain its
steady export growth rate at 8 per cent. This was largely driven by increased
demand for India-made cement, which forms a major component of the total
exports from the southern states of India.
The United Arab Emirates, followed by Saudi Arabia, also played their part
in pushing up exports from India—there was significantly high demand for
textiles and apparel from the former and an increase in demand for seeds,
beans, cereals and flour from the latter.
Exports to the United States remained flat, while exports to the United
Kingdom declined significantly, ostensibly owing to the impending formalisation
of Brexit. The impact of this has led to a substantial decline in exports from
East and South India, which are major trading partners with the United Kingdom.
The only commodity that has seen an upward movement in exports to the
United Kingdom from India is pharmaceuticals, which registered impressive
export growth of 87 per cent. As one of the many commodities driving reefer
(refrigerated containers) growth in the geography, the increasing demand for
pharmaceuticals is expected to add momentum to India’s drive to improve its
existing infrastructure for handling and storing refrigerated cargo. The top
commodities that are driving reefer growth from India is fruits and nuts, with
exports of grapes leading the way.
The cold chain market is a rapidly evolving opportunity, as the demand for
refrigerated products spirals in India and internationally. In fact, in India
alone, it has been growing at 18 per cent in the past years and a similar trend
is expected in the time to come.
While the government is playing its part in trying to iron out certain
challenges, the industry needs to gear up to offer multi-commodity ex-im
storage and distribution infrastructure which are critical to enabling this
growth. "As a company offering industry leading solutions in shipping and
logistics to customers worldwide, Maersk is well ahead in understanding and
offering these specialised services which apply to several products that are
traded from India. We believe we are well positioned to be able to cater to
this growing market demand. Today, we already manage customers both local and
international who deal with fruits, vegetables, meats and pharmaceuticals that
make up a major part of the cold storage ex-im business.
Other interesting facts related to exports from India are:
Fish at 46 per cent growth,
vegetables at 44 per cent growth and metals at 23 per cent growth are the top
three commodities driving exports from India
India has moved from being an
importer of metals to becoming a major exporter of this commodity, with East
India driving exports to North American and Mediterranean countries
China doubles imports to India while United States, Germany and South Korea
see major decline.
India’s traditional trade partners saw their share of imports into India
decline significantly as the realities of demonetisation and GST set in.
Each one registered a negative growth as previously fast moving commodities
like foodstuff, frozen fish and chemicals saw demand decline. On the other
hand, China almost doubled its imports to India to close at 29 per cent growth
in the first half of 2017. This was mainly led by a substantial increase in
demand for appliances and kitchenware coming from south and east India, which
was in turn being fulfilled mainly by China.
It is noteworthy that appliances and kitchenware also emerged to become the
fastest growing import commodity for India at 41 per cent growth in the first
half of 2017. This was followed by fruits and nuts, which grew to 23 per cent
during the same period.
"The pre-GST rush, especially for appliances and electronics, resulted
in this spike. Buyers were thronging retail outlets to take advantage of the
existing prices of goods which were expected to become more expensive after
GST. Now that this phase has passed, we expect imports from China to stabilise
and volumes to revert to pre-GST days", emphasised Mr Felder.
Some other interesting import-related insights are:
Imports growth for India holds steady
across north, east and south India with each individually registering an
increase to 9 per cent
Imports from Saudi Arabia outpaced India’s exports to that country
Import volume of containerised
reefers from North American countries grew substantially, with fruits and nuts
growing by 115 per cent
Imports from South Korea dropped significantly to close in the negative in
the first half of 2017—this grew by 111 per cent in the first half of 2016.
Paper imports grew only by 1 per cent in the
first half of this year, as opposed to 33 per cent growth in the first half of
2016 .In spite of the mixed developments in the first half of 2017, India’s
growth in global containerised trade remains impressive relative to most
sizeable markets around the world. Moreover, with the impact of key policy
changes now stabilising, it is expected that this will continue to strengthen
throughout the rest of the year, the report stressed.