India's Trade with BRICS and the World: Implications on Skill and Technology Content

Abstract

This paper analyses India’s exports to, and imports from, the four bilateral partners like Brazil, Russian Federation, China and South Africa (BRCS). The complete analysis carried out for the period 2007 to 2012. At the aggregate level, India had an overall negative trade balance with the BRCS trading partners. Reflected in India’s negative trade balance with China, Russia Federation and South Africa. The only country with which if enjoyed a trade surplus is with Brazil. Using the UNCTAD has classified the products into two broad categories i.e., Primary Products and Value Added Products. In 2012, the product count in resource intensive products has 31 percent share with 10 percent share in value of exports. The high skill- & technology intensive manufactures had 24 percent share in terms of product count while it had only 19 percent share in value of exports. Medium skill- & technology intensive manufactures had 21 percent share of tariff lines but accounted for 9.7 shares in terms of value of exports. Similarly, skill- & technology intensive manufactures accounted for nearly 12 percent share in tariff lines, but in terms of value, it accounted only 3.7 percent share. Overall, the category of Primary Products (PP), which includes the non-fuel primary commodities and mineral fuels accounted for 12.4 percent share of the total tariff lines and 58 percent share of the value of exports from India. The dominant country (based on top 20 imports) for imports by India from among the BRCS partner’s countries has been China, followed by South Africa, Brazil and Russian Federation. An analysis was undertaken to identify India's exports in three categories - value added exports in which exports potential is not fully exploited; products which have a high export potential across BRCS countries; and products with export potential in the BRCS partners but India does not have the supply capacities. The general composition of products in the three categories to the BRCS countries showed considerable similarities, South Africa showed some crucial difference with the dominance of export potential items realised by India’s exports having the highest number 352 products almost 42 percent share of total India’s VA exports – the highest share across the BRCS partner countries observed under this scenario. Under the first category of “export potential realised by Indian exports” only 23 products found to be common across BRCS countries accounting for 11 percent of the 222 products. While in the case of second category, “India's export capacity not fully exploited” nearly 83 percent of products found to be common to 3 to 4 countries of BRCS partners. Similarly, in the last category of “existing market in partner with India facing Supply Constraint” close to 84 percent of products were common to 3 or 4 countries. The tariff across countries have been converging by 2012, within a range of 7 to 15 percent, the extent of usage of non-tariff measures that needs to be scrutinised. India had a much lower WTO notified restrictions in terms of Sanitary and Phytosanitary Measures (SPS) when compared with its Technical Barriers to Trade (TBT) measures. Recommendations: 1. India having export capacity but not fully exploited category had nearly 50 percent share of the total Indian exports to BRCS. There is an urgent need for revamping the production structures in those tariff lines that identified to have the potential for exports but was not been fully exploited. One reason could be the prevalence of behind the border measures and regulations in the importing partners. This needs to be addressed by forging mutual recognition of standards, testing procedures, conformity assessment and accreditation of testing laboratories. 2. Primary product (PP) has a higher share in India's export basket to BRCS when compared to value added (VA) products. Special initiatives are required to promote value added exports from India to BRCS.