The recent World Bank report on India's economy indicated that while India may grow at a rate of 9 percent, the export sector may not be doing well though. With major global powers, the bastions of India's exports, still in uncertain waters, the country's export sector indeed needs to fight hard to bring in orders.
The report noted that the Indian economy is expected to make huge strides in 2011 growing at a pace of 9 percent with South Asia poised to grow a little slower. However, it cautioned that the shoots of recovery for the export sector of the whole region may not be strong enough.
India's drop in growth during the global economic crisis was minuscule compared to other nations and our economy had shown great resilience. However, I fear that if the current Eurozone crisis spreads to major nations in the continent, India too would see a slowdown in exports to the region. Even the industry body, FICCI seems to agree with my apprehensions when their recent study said that 'the sovereign debt crisis of Greece may spread over to other European nations which could have a catastrophic impact on Indian exports.'
While there is good chance of the crisis spreading to other economically vulnerable nations like Portugal, Spain and Ireland owing to their already weak public finances, I would say that the impact of the crisis on Indian exports will be marginal if it remains restricted to these nations because our exports to this part of the globe are limited. But if the crisis spreads across the bigger nations in the EU region, we will see a negative growth in exports to EU, which accounts for about a fifth of our total global exports.
As such Indian companies should work to expand the domestic demand which can help them grow better as opposed to export markets. It will perhaps be needless to say that the domestic market in today's context appears even more important, than it was a couple of years back before the recession. Moreover we can highly benefit from new engines of growth and adapting to requirements of the emerging markets in Asia.
It's a fact that emerging markets have gone up spectacularly this year and 2010-11 too will be no different. While it will be a year of consolidation for the developed world, emerging markets will see more growth, which in turn means more demand. Emerging markets enthusiasts will now reiterate that Asia's emerging markets are where the future lies, and this time it looks like these markets could be the lifeline for India's export community.
The report noted that the Indian economy is expected to make huge strides in 2011 growing at a pace of 9 percent with South Asia poised to grow a little slower. However, it cautioned that the shoots of recovery for the export sector of the whole region may not be strong enough.
India's drop in growth during the global economic crisis was minuscule compared to other nations and our economy had shown great resilience. However, I fear that if the current Eurozone crisis spreads to major nations in the continent, India too would see a slowdown in exports to the region. Even the industry body, FICCI seems to agree with my apprehensions when their recent study said that 'the sovereign debt crisis of Greece may spread over to other European nations which could have a catastrophic impact on Indian exports.'
While there is good chance of the crisis spreading to other economically vulnerable nations like Portugal, Spain and Ireland owing to their already weak public finances, I would say that the impact of the crisis on Indian exports will be marginal if it remains restricted to these nations because our exports to this part of the globe are limited. But if the crisis spreads across the bigger nations in the EU region, we will see a negative growth in exports to EU, which accounts for about a fifth of our total global exports.
As such Indian companies should work to expand the domestic demand which can help them grow better as opposed to export markets. It will perhaps be needless to say that the domestic market in today's context appears even more important, than it was a couple of years back before the recession. Moreover we can highly benefit from new engines of growth and adapting to requirements of the emerging markets in Asia.
It's a fact that emerging markets have gone up spectacularly this year and 2010-11 too will be no different. While it will be a year of consolidation for the developed world, emerging markets will see more growth, which in turn means more demand. Emerging markets enthusiasts will now reiterate that Asia's emerging markets are where the future lies, and this time it looks like these markets could be the lifeline for India's export community.
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