Sector-wise exports data show that the biggest problem area is the manufacturing sector. Half of Indias total exports are in the non-manufacturing sectors such as petroleum products, agriculture and allied products, and gems and jewellery. Growth in exports of engineering goods moderated from 27% in FY08 to around 9% in FY14, and that of electronic goods slumped from 19% to 9% during the same period. The share of engineering goods and chemicals has been stagnant at 18-19% and 13-14%, respectively.
While Indias share of global goods exports grew from 0.8% in 2002 to 1.6% in 2013, it still remains far below Chinas share of 11%. Over the years, the country has lost marketshare in important regions like America and Europe as the share of Indias exports to America and Europe declined from 46% in FY02 to 36% in FY14. The country will have to overhaul its manufacturing business environment to improve its share in the global goods exports. The key factors constraining manufacturing are the lack of world-class infrastructure, rigid labour laws, inefficient tax laws and regulatory delays. Reviving the growth in exports will be imperative to create employment opportunities.