Economic Times: March 06, 2017
Mumbai: India is outpacing China in export growth of locally made retail and lifestyle products, according to Damco, the world’s seventhlargest freight forwarder.
An analysis of sourcing data by the transport and logistics arm of Danish shipping conglomerate AP Moller-Maersk Group shows that amid tepid global economic conditions, Indian exports of these products grew at a compound annual growth rate (CAGR) of 10% between 2013 and 2016, while China registered only 5%, though it had a much bigger base.
“Contrary to the bleakness of global trade, the future looks promising for India,” Damco chief executive officer Klaus Rud Sejling said in an interview with ET. “The country is clearly well-poised to shape global trade, as global retailers are constantly looking for suppliers that are nimble enough to be able to adjust with troughs and peaks in the demand cycle, not only from an output point of view, but also when it comes to developing entirely new products and customising existing lines.”
Sejling, who took over as global CEO of Damco in October 2016, was in India for a global leadership meet, the first under his leadership held outside Copenhagen, Denmark.
Global trade is battling on many fronts. Lukewarm demand has pushed container lines like South Korea’s Hanjin to bankruptcy and forced others in the industry to consolidate in order to stay afloat. Apprehensions of a protectionist approach to global trade under Donald Trump’s regime has added to the uncertainty.
“Year 2017 will see some organic growth, but maybe only around 2-3%,” Sejling said. According to Damco’s data for India, exports of bedding and bath products, home decor products and textiles were the key drivers, accounting for 53% of the country’s total retail and lifestyle exports volumes.
Vishal Sharma, Damco’s CEO for India, Sri Lanka and Bangladesh, said: “In the past 24-36 months, we have seen a structural interest in global companies to move sourcing to India as manufacturing in China is becoming expensive. Also, as a way of having contingency and balancing supply chains, they are zeroing in on India.” Sharma was present during the interview which was held last week.
“India-based manufacturers are benefiting significantly from access to quality raw materials that are competitively priced. Their improving agility combined with the efforts of the government is making India an increasingly attractive destination for global brands,” Sharma said.
Disclaimer: This information has been collected through secondary research and IBEF is not responsible for any errors in the same.