Niche opportunities abound in China

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: China’ under a project supported by UNCTAD, DFID and department of commerce. The study was conducted by Amitendu Palit of ICRIER.

The study brings out clearly that there is a huge market in China waiting to be tapped. However, these opportunities may not be spread sector wise but lie in product niches. For identifying competitive exports, the study looks at Indian and Asean exports to China in the last five years and also at products that the Asean countries and India are exporting to other parts of the world, but not to China, for gathering insights on competitiveness.

In a further detailed analysis of Indian and Asean exports to China, the report has identified exports that are common to India and Asean and the ones that are not. Competitiveness of Indian exports has been determined by employing tested empirical methods such as competitive revealed advantage. According to the study, there is a ‘ready market’ in product categories in sectors such as textiles and apparels, leather, chemicals and dyes and marine and tea/coffee. The study empirically brings out that Indian exports in these categories are very competitive.

In leather alone, China imports goods worth $4 billion, much greater than the entire exports from India to the rest of the world. Ironically, China so far has not been even on radar of Indian leather exporters. The products of Indian interest in China are trunks, suitcases, vanity cases and handbags with outer surface of leather; leather belts and bandoliers.

Indian exports in this category are just $2.7 million whereas the Chinese imports in the same are in region of $357 million. So there is a potential of expanding exports 13 times.

Similarly, in inorganic chemicals, China’s import in categories where India has a clear competitive edge is to the tune of $6.3 billion while India’s exports to China stands at $316 million. The scenario presents a major potential area for increasing our exports 20 times.

In textiles, the product categories where India has competitive advantage in exports is paltry $2 million, whereas China imported goods worth $137 million. That means a potential for increasing the exports 60 times.