State needs to expand export basket, says FIEO study

Kerala would do well to expand its export basket to include the three Es – electronic, electrical and engineering – for which the demand is growing, says a study by the Federation of Indian Export Organisations (FIEO). New sectors in which the state has a competitive advantage should also be explored alongside, FIEO said and […]

Kerala would do well to expand its export basket to include the three Es – electronic, electrical and engineering – for which the demand is growing, says a study by the Federation of Indian Export Organisations (FIEO).

New sectors in which the state has a competitive advantage should also be explored alongside, FIEO said and identified products capable of improving the state’s export competitiveness and providing higher job opportunities.

Product classification

The product clusters are classified as – Fortune Changers, Front Runners and Favourites — so that the government could put its limited resources to get higher growth in a short span of time. The products that could change the state’s fortunes such as electronic items, machinery and parts, pharmaceutical items, medical equipment, value-added chemicals, plastic products and essential oils are the Fortune Changers.

Front Runners contain items such as jewellery, rubber products, coir products, wood products especially plywood, textiles and automobile components.

Favourites represent traditional products such as coffee, tea, spices, shrimps, natural gums, coconut, coconut oil, marine preparations, meat products, foodstuff and beverages.

Roadmap

Kerala is the seventh largest exporting atate with a contribution of $4.8 billion during 2015-16. FIEO report also prepared a roadmap to achieve a target of 5 per cent share in India’s exports in the next five years.

To boost export competitiveness, the report called for policy initiatives focusing on three areas – basic requirements, efficiency enhancers and innovation and sophistication.

According to the study, the state has competitive lines in spices, essential oils, rubber related and carpet products. However, these items accounted for just 20 per cent of the export revenues. Most of the exports are from primary and low technology sectors whereas representation of high-value items is minimum.

Govt focus

Funded by Kerala State Industrial Development Corporation, the study was conducted in the context of the state losing its dominance in some of the major agricultural sector exports. The government wants to encourage the MSME sector, create more employment opportunities and to help farmers get better prices for their produce.

Source: The Hindu Business Line