Export Potential of Currently and Potentially Traded Products

6.2 Export Potential of Currently and Potentially Traded Products

India’s export potential can be separated into those products that are currently traded with China and also those potentially traded products that can be tried by Indian exports to the Chinese market by looking at their globally competitive position. The total bilateral export potential of India is separated from currently and potentially traded products (see Table 6.2).

The export potential of currently exported products of India was constituted

60.9 per cent of India’s total bilateral export potential in China in 2008 and increased to 85.5 per cent in 2012. This indicates that there are several products

that are not exported to China, but have nevertheless a large export potential in China. India can pursue export of such products to China on the basis of its global competitiveness. Like the current bilateral flow of exports, the export potential of India is also highly concentrated in selected sectors. This is the case for both currently and potentially traded products of India to China. Among the currently exported products, the export potential is more evenly distributed across sectors than among the presently non-exporting sectors.

Table 6.2: Export Potential of India in China in 2012

(For currently and potentially traded products)

(in million US$)

Share (percent) Exporting Sec

Description to Total

Export Potential Currently

Not Exporting Exporting

Not Exporting Exporting (percent)

1 Live Animals and Animal Products

38.2 11.8 0.4 15.8 2 Vegetable Products

7.9 2.8 68.0 3 Animal or Vegetable Fats & Oils

0.9 8.0 0.0 0.6 4 Prepared Foodstuff, Beverages, etc.

80.1 6.1 0.8 43.2 5 Mineral Products

6.5 5.5 83.4 6 Products of Chemicals

12.7 8.3 79.5 7 Plastics & Articles thereof

0.8 8.1 98.4 8 Raw Hides & Skins, Leather, etc.

5.09 31.5 0.3 0.3 86.1 9 Wood & Articles of Wood

6.20 35.2 0.4 0.3 85.0 10 Pulp of wood or of other Fibers

0.4 1.2 94.3 11 Textile & Textile Articles

1.0 4.3 96.2 12 Footwear, Headgear and Umbrella

0.39 11.6 0.0 0.1 96.7 13 Articles of Stone, Plaster, Cement

2.83 82.4 0.2 0.8 96.7 14 Natural or cultured pearls, Jewellery

8.05 61.5 0.5 0.6 88.4 15 Base Metals & Articles of Base Metal

4.2 8.7 92.5 16 Machinery & Mechanical Appliances

11.4 47.0 96.1 17 Vehicles, Aircraft and Vessels

21.4 5.1 58.4 18 Optical, Photograph & Cinematography

4.0 5.1 88.3 19 Arms and Ammunition

0.19 0.0 0.0 0.0 0.0 20 Miscellaneous Manufactured Articles

44.62 54.8 2.6 0.5 55.1 21 Works of Art Collectors' Pieces

Source: RIS estimation based on Comtrade, online [Accessed on October 25, 2013, United Nations] Note: Export potential is in million US$, and growth and share in percentage. Export potential is estimated using the model presented in Appendix III. It is estimated at 6-digit HS, using bilateral trade flow.

Among the currently traded products, export potential is mostly concentrated in seven sectors, namely, minerals, machinery, plastics, chemicals, automobiles, optical & precision instruments and base metals. These sectors share nearly 87.8 per cent of the total bilateral export potentials of India from the currently traded products in 2012.

India is yet to introduce some of its globally competitive products in the Chinese market. These products are mostly concentrated in the mining sector in pre-recession period and there have been many such sectors in recent years. Such existing export potential products are evenly spread over other sectors such as fruits & vegetables, machinery& electrical products, automobiles, chemicals, animal products, processed food, and minerals, among others.

We bring home the point that the export potential in India’s currently and potentially traded sectors are mostly linked to diversified sectors. However, Chinese

imports have been more inclined towards technology-intensive sectors since its exports are becoming more technology intensive in recent years. India has to restructure its export orientation to meet the specific import requirements of China, so that it can have wider access to the domestic market. If product restructuring is initiated in the Indian export basket, it can reduce its current pressure on bilateral trade imbalance so as to normalise its trade with China in the medium term.