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This section is based upon the data collated from the nomination details submitted by the short-listed companies, and seeks to highlight some of the key characteristics of these 585 leading exporters. We look at underscoring the business and operational dynamics of large, medium, small and micro exporters across 10 sectors. These 10 sectors include chemicals, petrochemicals & plastics; engineering goods; food & agro products; gems and jewellery; IT & ITeS (excluding hardware); leather and leather products; minerals & metals; pharmaceutical products; readymade garments; and textiles. Additionally there are provisions for a multi-category sector too for companies that operate in more than two of these sectors. The four revenue categories are as follows: micro - exporters with annual turnover of below Rs 100 mn; small - exporters with annual turnover in the range of Rs 100 – 1,000 mn; medium - exporters with annual turnover in the range of Rs 1,000 – 5,000 mn ; large - exporters with turnover above Rs 5,000 mn in FY07.

The aggregate turnover of these companies stood at Rs 3,032.66 billion, with an export revenue of Rs 1,515.81 billion for the fiscal 2007. The companies’ aggregate net profit in the same year stood at Rs 281 billion and they together employed around 618,527 employees. For FY07, the companies displayed an overall combined year-on-year growth of 34.9% in total turnover and 48.9% in export revenue.

Some of the prominent characteristics of the sample are

• The maximum representation of companies, around 45%, came from the small category.
• Approximately 54% of the sample exporters commenced operations in the post liberalisation period of 1991. Around 29% of companies started their export operations    post 2000.
• Exporters from the micro bracket exhibited the lowest y-o-y growth at 13% in export revenue; those from the large bracket displayed the highest at 52%.
• 78% of the exporters operated as manufacturer-exporters; while 49% of exporters were designated as star export houses.
• 72% of the companies earned more than 50% of their earnings from the exports markets.
• Europe emerged as the most preferred export destination for large number of companies.
• In Asia, Singapore and Sri Lanka turned out to be the most promising region for exports.
• Private and public companies, with 37% each, equally dominated in terms of ownership pattern.
• 29% exporters operated as export oriented units (EOUs)
• Among exporters the Duty Entitlement Pass Book Scheme (DEPB) schemes emerged as the most popular scheme

Export trends

Textile product segments contributed major share to overall exports

The textiles sector cornered the lion’s share with 44% contribution to the total export revenue among sample companies. The textile sector also displayed the highest growth of 81% amongst all categories in FY07. The textile sector was followed by the IT and ITeS sector with 17% revenue contribution to total exports.

Exporters from engineering and chemical, petrochemical & plastics sectors accounted for the maximum representation in terms of number of companies in the sample. But it’s interesting to note that in terms of export revenue generation, exporters belonging to engineering and chemical contributed only 9% and 11% respectively to the total export revenue of the sample companies.

Other key findings include -

• Gems & Jewellery emerged as the most export-oriented sector, earning 91% of its total revenue from the overseas markets.
• Exporters from the multi-category segment recorded the highest y-o-y in total turnover, amounting to 58%; this was followed by the IT and ITeS sector, which    recorded a growth of 46% in total turnover.
• Apart from textiles, the multi-category and food & agro were sectors that displayed more than 50% growth in export revenue for FY07.
• Large exporters contributed 86% of the total export revenue, which implied a y-o-y growth of 52% in FY07. This group also exhibited the highest net profit growth of    42% among all revenue categories.
• The leather sector, which has been identified as a thrust area by the government, earned 81% of its revenue from the export market, and displayed a 26% growth in    its export revenue for FY07.

Preferred export destinations

Europe emerged as most favored export destination. This could help to offset the dollar depreciation against Indian Rupee

• Europe turned out to be the most favored export destination with 33% of the companies earning their revenues from this region, followed by Asia and America.
• The US and Germany were the most preferred destinations within the American and European regions.
• Russia and Ukraine turned out to be prospective export destinations in the CIS region.
• Singapore, which is India’s largest trading and investment partners in ASEAN, emerged as one of the most popular export destinations in Asia.

In recent years India has recognised the export potential of Africa. With India, on the verge of providing preferential market access for exports from all 50 Least Developed Countries, of which 34 are in Africa, bilateral trade is expected to increase in the coming years. South Africa emerged as the most lucrative country for export in the African region where India holds the rank of 20th largest exporter and importer for South Africa and is its sixth largest trading partner in Asia.

In the Middle East, the UAE was the most preferred spot; the Associated Chambers of Commerce and Industry (ASSOCHAM) has predicted that India’s trade with the UAE will touch $ 25 bn by 2010.

With plans to treble the bilateral trade from around $3.2 billion to $10 billion by 2010, Brazil turned out to be the most promising export destination in the LAC region. Mexico emerged as the other prominent market in LAC region with India signing a ten-year bilateral investment promotion and protection agreement (BIPPA) with Mexico in 2007 for promotion of free investment.

Regional export patterns

Maximum number of exporters located in the western region

Expectedly, the western region of India, with 39% representation, accounted for the maximum number of exporters. It was followed by 29% southern-based exporters and 26% northern-based exporters. Maharashtra in the western region, Tamil Nadu in the south and Uttar Pradesh in the north emerged as a strong base for a sizeable number of exporters.

• Majority of exporting companies from the north, west and south regions are from the engineering sector, accounting for 26%, 32% and 22% respectively from the total    sample for each of these regions.
• Exporters from the leather industry dominated the eastern region sample, with a 25% representation.
• More than 50% of the exporters in chemicals, IT, pharmaceuticals and textile sectors were public limited entities.

Hurdles and institutional assistance

Although global opportunities have opened new avenues of business, exporters still face some common hurdles across borders. Tariff as well as non-tariff barriers in the form of technical barriers to trade (TBT) are a major cause of concern for developing countries whose exports are greatly scrutinized for protection of human health, safety and the environment. Custom clearance and delay in shipping of goods due to unavailability of adequate infrastructure are some of the other common obstacles at the national level.

• In the non-tariff barrier (NTB) area, Technical Barriers to Trade (TBT) appeared to be the most prominent hurdle for exporters. An example of this is the absence of    India from the approved list for import of poultry meat products into European countries.
• On the domestic front, 30% of companies pointed custom clearance and customs valuation as major obstacles for exports.
• Transparency in rules and procedures to overcome bureaucratic hurdles emerged as the most significant form of institutional assistance that the exporters need.

Note: On a scale of 1 to 5, 1 stands for requirement of minimal level of assistance; 5 stands for requirement of maximum level of assistance