NEW DELHI, Jun. 29 (Korea Bizwire) –– The growth of South Korea’s exports to India is slowing sharply due to stiffer competition from Chinese rivals, data by local trade associations showed Friday.
Shipment figures from the Korea International Trade Association (KITA) and Korea Trade-Investment Promotion Agency said South Korea exported US$6.22 billion worth of products to India up to May this year, up 4.3 percent from the same period last year. This is about half of the overall 8.1 percent increase. It also pales in comparison with 29.8 percent exports gain to India last year compared with the 15.8 percent overall increase.
India is the seventh largest export destination for South Korea.
Analysis indicates that the downturn in shipments of electronics equipment and components was the starkest, losing 42.9 percent in the measured period this year from last year. Exports in other key items, such as steel and auto parts, rose 36.9 percent and 21.1 percent, respectively.
Specifically, exports of wireless network equipment dropped 91.1 percent. The products were South Korea’s No. 1 exports to India in 2016, No. 2 in 2017.
Researchers at the associations said India was nearing completion of its next-generation wireless network, which lowered demand for related imports. The growing competition with China also hurt South Korea, they said.
China has been enlarging its market domination as the top exporter to India. China’s market share of India’s imports has been rising steadily, from 10.7 percent in 2012 to 15.5 percent in 2015, 16.8 percent in 2016 and to 15.4 percent in 2017. Electronics equipment appeared to be leading the climb, accounting for 38.4 percent of India’s imports in the first half of last year compared to 25.9 percent in 2012.
South Korea’s market share in India was 2.8 percent in 2012, 2.7 percent in 2013 and 2.9 percent in 2014. It surpassed 3 percent in 2015 to 3.3 percent and rose to 3.4 percent in 2016, which was maintained in the first half of last year.
India’s trade volume in monetary terms ranked at 14th globally with $745.62 billion in 2017.
“India’s consumption is increasing as the market shows high growth of over annual 7 percent from reforms and other outcomes, but the rivalry with China and other key countries is becoming more intense,” Moon Byung-ki, a lead researcher at KITA’s analysis & forecasting department, said of the analysis.
“In order to improve market access to India, we need to strengthen export competitiveness through more liberalization in the South Korea-India Comprehensive Economic Partnership Agreement, active marketing promotion and improved brand image and diversification of export products,” Moon added.