Exim Bank focuses on apparel, marine products

New Delhi, Jan 25 | Updated: Jan 26 2005, 05:30am hrs
The Export-Import Bank of India (Exim Bank) has identified apparel, spices, and marine products as areas where the cluster approach to exports will significantly raise productivity. This will consequently direct more funds from the bank to these sectoral clusters in order that they capture international markets.

According to a recent study by the bank, the future of the apparel sector in the post multi-fibre agreement regime will be shaped by younger firms which have gained knowledge of MFA and logistics of the world apparel trade. Exporters with design capabilities are likely to gain an edge over others. Already, niche exporters, for instance those that target non-resident Indians (NRIs), are earning good foreign exchange, according to the study.

These firms usually have focussed investments in manufacturing and marketing. Entrepreneurial zeal coupled with professionalism and product focus are the prominent successful business practices essential to the sector. The country needs to focus on small exporters through an export-oriented cluster approach as they contribute to 40-45% of Indias garment exports. They depend heavily on the ability to find individual buyers through personal contacts.

The champions in the spices sector are second and third generation entrepreneurs who have a wide global presence and strong farm/plantation level backward linkages. They have contributed to Indias position as the worlds largest producer and exporter of spices. There are Also-Ran exporters who make very less value addition like chilli powder exporters. Most of these have contacts with one or two international buying agents as their customers and export primarily to developing countries in Africa and Middle-East.

Marine products is another important cluster for Indian exports with Japan accounting for 41% of Indian exports. Shrimps form the biggest export item accounting for 74% of the value in this sector. Marine production in India has, however, been stagnating at three million tonnes for the past few years as low entry barriers and high demand from importers has led to strong competition for raw material sourcing. Thus, Indian exports are in low bulk frozen form rather than processed. But a number of exporters with export turnovers of more than Rs 100 crore have emerged to be in a position to exploit economies of scale.