Export Marketing | TYBCOM | Semester 5 | Chapter 1 | Introduction to Export Marketing | Lecture 7
Hemal Sir・2 minutes read
Indian exporters face challenges including reduced demand due to global recession, competition from countries like China, high product standards, sea piracy, and negative perceptions from overseas buyers. Simplified documentation and preferential agreements aim to address export hurdles, but issues like poor infrastructure and trade barriers continue to impact Indian exporters.
Insights
- The reduction in export incentives by the Government of India, along with increased competition from countries like China and the USA, has significantly impacted Indian exporters, leading to demotivation and challenges in the global market.
- Exporters face a multitude of obstacles, including sea piracy, negative perceptions of Indian products by overseas buyers, stringent product standards, and infrastructure deficiencies, all of which contribute to the struggles faced by Indian exporters in securing orders, delivering goods on time, and competing effectively in the international trade landscape.
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Recent questions
What challenges do Indian exporters face?
Reduced demand, tough competition, and quality standards.
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Summary
00:00
Challenges Faced by Indian Exporters
- The lecture focuses on the problems faced by Indian exporters in the export sector.
- Recession in world markets, such as the 2008-2009 subprime crisis in the USA and the 2011-2012 Eurozone crisis, led to reduced demand for Indian exports.
- Reduction in export incentives by the Government of India, including lower duty drawback rates and withdrawal of income tax benefits, demotivated exporters.
- Developed countries like the USA providing subsidies to their exporters created tough competition for Indian exporters in the global market.
- Competition from China, with lower production costs leading to lower prices, posed a significant threat to Indian exports, especially in European and developed countries.
- Product standards demanded by overseas buyers required high-quality products from India, subjecting exports to testing in importing countries.
- Anti-dumping duties imposed by developed countries like the USA on Indian metal pipes in August 2018 aimed to protect domestic businesses, leading to disputes resolved through the WTO.
- Sea pirate attacks posed a problem for Indian exporters shipping goods via sea routes, impacting the transportation and safety of exports.
19:07
Challenges in Indian Export Trade Industry
- Sea piracy in the Gulf of Aden poses a significant risk to international trade, affecting over half of India's merchandise trade. New exporters and importers struggle to obtain insurance due to increased pirate attacks.
- Negative attitudes of overseas buyers towards Indian goods, especially from developed nations, impact exports. Buyers perceive Indian products as inferior in quality and service, leading to challenges for Indian exporters.
- Documentation formalities for exports have been simplified, reducing the number of mandatory documents required to three: airway bill, commercial invoice, and shipping bill or bill of export.
- Foreign exchange regulations dictate that exporters must realize sale proceeds in foreign currency within six months, creating challenges for exporters who may face delays or credit risks.
- Poor infrastructure in India hampers exporters' ability to secure orders and deliver goods on time, with inadequate port handling and transportation facilities discouraging exports.
- Trading blocks impose barriers on non-member countries like India, hindering exports by increasing tariff and non-tariff barriers. India has signed preferential agreements with Asian countries to mitigate these challenges.
- Exporter-related problems include delays in handling grievances, high pricing compared to other exporting countries, poor promotion mix, and quality-related issues, all contributing to demotivation among Indian exporters.
