Export & Import are the two major activities that contribute to the growth of the economy of any country. They are also the major contributor to the GDP growth and reason for the foreign currency flow in any country. As per the report of Morgan Stanley Capital International (MSCI) 2019, India is considered as one of the fastest growing economies and one of the potential emerging markets in the Asian territory.
The total GDP of the world is continuously growing even after the major recessions like in 1929 & 2009. The total GDP of the world economy is USD 80.935 Trillion in 2017.
(Reference: GDP of the World, World Bank Data, https://data.worldbank.org)
The total GDP of India is rapidly growing which also supported by the different factors like ease of doing business, the presence of natural resources, manpower, capital & land. The total GDP of India economy is USD 2.65 Trillion in 2017.
Factors & Strategies
In comparison to the other economies, there are many factors & Strategies that are contributing to the constant increase in the export & import in India:
- The mix presence goods and service industries in the Indian economy
- Understanding towards different cultures
- Growing in number of institutions, education and literacy rate gave the confidence to the Global companies to set-up their Office in India
- Collectivist society, long term-orientation and good at work-orientations as per the Hofstede’s cultural analysis.
- Long Coastal line
- Well developed Special economic zones
- Heavy investment in the development of the road and rail infrastructure
- Good connectivity in seaports, airports, & ICDs
- Good relationship with other unions and treaties like the USA, European Union, ASEAN, South Asian and African countries.
- Tax relaxations to promote the import & export of different commodities
- Ease of doing business index (Rank:100)
- Present infrastructure in metro cities.
- Presence of the stable airline, logistics, cargo, and Shipping companies.
- India currency & US Dollar value.
- Growing economic indicators like GDP & GDP Purchasing Power Parity(PPP).
- Steady growth in the inflation rate
- Free trade and Bi-lateral agreement with different countries.
- The stable Indian Government and their upcoming policies to improve the import & export compliances.
- Implementation of projects like Sagarmala Project and improvement of the brownfield airports, presence of metro connectivity in the cities
The other factors and attributes that have an edge to the imports & exports in the India:
- Competitive advantages with Companies
- Presence of Government instructions like
- Exports Councils
- EXIM Bank
- In 2017, exports for India was 489,400 million US dollars. Exports of India increased at an average annual rate of 14.26 % in 2017. (Table:1)
- In 2017, exports of goods for India was 304,106 million US dollars. Exports of goods in India increased at an average annual rate of 13.32 % in 2017. (Table:2)
- In 2017, exports of services for India was 185,294 million US dollars. (Table:2)
- In 2017, imports for India was 561,612 million US dollars. Imports of India increased growing at an average annual rate of 13.81 % in 2017. (Table:1)
- In 2017, goods imports for India was 452,241 million US dollars. Goods imports of India increased growing at an average annual rate of 14.63 % in 2017. (Table:2)
- In 2017, service imports for India was 109,371 million US dollars. Service imports of India increased growing at an average annual rate of 12.39 % in 2017. (Table:2)
- Organizational and network the capability of International firms are significantly associated with strategy and performance. Indian Companies are also emphasizing upon building performance & strategy.
- Implementation of Inventory Management software’s
- Continuous improvement through imparting training to their employees
- Incentive system to the employees & buyers/traders/importers
- Positive control of the distribution channel
- For Incremental Sales:
- Bundling products
- Discounts on bulk buying
- Achieving economies of scale
- Participating in the International events & exhibitions.
- Maintaining relationships with customers for repeat orders
- Upgrading the certification levels as per the International markets
- Entering into the untapped markets through collaborations, partnerships, joint ventures.
- Sales promotion activities
- cost-leadership strategy i.e. offering better price to the buyers
C) Building the Customer Loyalty:
- Brand awareness campaigns.
- Value addition for the target audience which may define benefits.
- Urge for extensive brand building activities for sustainable growth.
- Promotion through paid digital marketing tools to increase the impressions and visibility of the company.
Reference: Knoema Corporation (US), https://knoema.com
- Total Exports of Goods & Services
|Exports of Goods & Services|
|Date||Value in USD|
- Exports of Goods & Services
|Date||Exports of Goods||Exports of Services|
|Value in USD||Value in USD|
- Total Imports of Goods & Services
|Imports of Goods & Services|
|Date||Value in USD|
- Imports of Goods & Services
|Date||Imports of Goods||Imports of Services|
|Value in USD||Value in USD|
By: Parul Mehta#MDI Gurgaon