Analysis of India?s trade in select capital goods items reveals that in the case of most products, India is a net importer. This calls for the need to expand capacity and upgrade technology to cater to the rising demand from the domestic as well as the export markets, says an Exim Bank study.
The country exports capital goods items to both developed and developing countries. However, India?s share in these markets is insignificant, indicating ample scope for expansion of market share.
The study suggests the effective use of Exim Bank?s lines of credit mechanism for market expansion in the existing markets and penetration in new markets, says the report. In addition, the study emphasises the need for encouraging technology sourcing from countries such as Germany, Switzerland, Italy and Spain, especially in the context of shift in manufacturing base from developed to developing countries. Indian players should also effectively adapt the strengths of machining technologies in developing countries such as China.
Changing trends in product quality and safety standards should be monitored and addressed, to sustain market presence in developed countries, the study added. Also, developing countries of Asia, Africa, Latin America and central and east Europe should be targeted for market expansion. With such strategies, the capital goods industry could become internationally competitive. The study emphasised that sale of capital goods should be associated with technical support in transportation, erection, training, continuous service maintenance and periodical upgradation of technology.