Declining exports to Asian peers sees export-GDP ratio fall 5 per cent in 10 yrs
India’s export-GDP ratio has declined from 17.16 per cent to 12.37 per cent in the past ten years mainly due to the weakening shipments to its Asian peers, including China.
Chennai: India’s export-GDP ratio has declined from 17.16 per cent to 12.37 per cent in the past ten years mainly due to the weakening shipments to its Asian peers, including China. The increasing US exports has been helping India maintain the ratio from falling more. However, the tariff war is likely to see the ratio deteriorate further in the coming years.
As per the data from RBI, India’s export-GDP ratio, which stood at 17.16 per cent in FY13-14, is down to 12.37 per cent in FY24, after having declined to a low to 11.08 per cent in the pandemic year of FY21.
The main contributor to this decline has been shrinking exports to Asian countries. The exports to China, which stood at $18 billion in FY11-12 is down to $16 billion, recovering from $9 billion in FY16.
Similarly, Hong Kong has seen Indian shipments declining from $14 billion in FY18 to $8 billion in FY24. Exports to Singapore, which stood at $16.7 billion in FY12 is down to $14.4 billion after dropping to $7.7 billion in FY16. Indonesian exports are down from $6.6 billion in FY12 to $5.9 billion in FY24.
The exports to the Middle East have been almost stagnant in the 10-year period. The exports to UAE, which stood at $33 billion in FY15, has moved to $35.6 billion by FY24. Saudi Arabian exports remain at $11 billion in these 10 years and shipments to Iran have dropped from $4.1 billion in FY15 to $1.2 billion in FY24.
Exports to the European Union, which stood at $51 billion in FY14 is at $54 billion in FY24.
However, the exports to the US and Australia have been showing encouraging signs in the past 10 years. US exports grew from $39 billion in FY14 to $77 billion in FY24. This growth is under threat with the new tariff war initiated by the US. Shipments to Australia moved up from $2.3 billion in FY14 to $7.9 billion in FY24. Canada too saw a growth from $2 billion to $3.8 billion in these 10 years.
Meanwhile, the import-GDP ratio too has been down from 25.11 per cent in FY14 to 19.16 per cent. While the imports from China and other Asian peers as well as that from the US, have shot up, imports from other trading partners have come down.
Imports from China grew from $43 billion in FY11 to $101 billion in FY24. Hong Kong’s shipments grew from $5.5 billion to $20 billion, South Korea doubled from $10 billion in FY11 to $21 billion and Singapore saw a growth from $6.7 billion in FY14 to $21 billion by FY24.
Imports from the US also have been growing from $20 billion in FY11 to $42 billion in FY24. With Trump insisting on bridging the trade gap, imports from the US are likely to go up in the coming years.
