Indian exporters, especially small and medium-sized enterprises, stand to benefit from expanding into growing economies like Africa and the Commonwealth of Independent States (CIS) instead of traditional developed markets like the US and Europe, amid the ongoing turmoil.
“It is the right time for exporters to look at new segments and products. While the primary preference for exporters remains the US and European markets, these traditional and developed markets are not only shrinking, but also have high competition, and small and medium enterprises may not be able to compete in these markets. All these markets are also having increasingly high internal disturbances,” K Rangarajan, professor and head of the Indian Institute of Foreign Trade, Calcutta campus, told The Telegraph.
“So it is high time to spread out and look for markets that are growing. CIS and African countries are emerging as markets for exporters to look at,” Rangarajan said on the sidelines of a Merchants Chamber of Commerce organised session on Saturday.
With India’s share of world exports estimated at only 1.8 per cent, diversification is expected to play a crucial role in raising the share.
He said that based on how the tariff wars, spearheaded by the US, play out, trade corridors in emerging economies could be among the safest bets.
“The trade corridors primarily linking advanced economies to China and Russia would sink sharply. On the product side, electronics trade could see big shifts followed by textiles and machinery. These manufacturing value chains bridge geographically distant economies. So they are more susceptible than others to fragmentation,” Rangarajan said.
He further expects that with the rising prominence of India in the global market, even if the US takes a hard stance in the ongoing negotiation on a bilateral trade agreement, there will likely be room for subsequent revisions.