Kerala has an Untapped Potential of US$ 6.7 billion in Merchandise Exports

KOCHI:
According to a Study published by the Export-Import Bank of India (Exim Bank), merchandise exports from Kerala stood at US$ 9.8 billion in 2018-19. Although exports from the state have registered robust growth during the recent period, there remains an untapped merchandise export potential of nearly US$ 6.7 billion. Realizing this potential could increase merchandise exports from the state to nearly US$ 16.5 billion. With a favourable policy framework and concerted efforts to boost exports, Kerala could target to achieve US$ 54.7 billion of export revenues by 2024- 25.

Exim Bank organized an interactive webinar on the theme ‘Potential for Enhancing Exports from Kerala’ on 14 th August 2020, to familiarize participants with the potential export opportunities, as also to proffer key export strategies for Kerala to realise its latent potential and achieve higher export growth trajectory. The programme was attended by more than 70 participants, and had speakers from the Government of Kerala (GoK) and Exim Bank.

On this occasion, Exim Bank released a working paper titled ‘Promoting Exports from Kerala: Insights and Policy Perspectives’. The Study identifies a six-pronged export strategy for the State, built upon the essential dimensions of diversification of products and markets, infrastructure leverage and strengthening, capacity building, fiscal incentives, devising an export promotion campaign, and institutional streamlining. The Study recommends diversification away from traditional export items for Kerala towards higher value-added products such as processed food, technical textiles, bulk drugs, and electronics and machinery.

Highlighting the role of trade enabling infrastructure in export competitiveness, the Study recommends, inter alia,adoption of a public-private partnership model for strengthening the existing network of waterways, creation of a fund for development of export infrastructure in the non-major ports, increasing warehousing capacity in the districts of Alappuzha and Palakkad, leveraging Central Government sponsored schemes for enhancing the cold chain network, utilizing IT-enabled services to improve the reach and connectivity for agricultural produce, and setting up a Centre of Excellence for the Animation, Visual Effects, Gaming and Comics sector in the state.

From the perspective of capacity building, the Study suggests development of a branding strategy for products in which the state has Geographical Indications, refund of expenses incurred by exporters in the state for obtaining statutory certifications, assisting firms in availing funding for cutting-edge technologies under various Central Government schemes, encouraging hospitals in Kerala to tie-up with foreign health institutions/ hospitals, and creating awareness about finance and risk mitigation products.

The GoK could also consider fiscal incentives such as capital subsidy or grants in priority sectors and reimbursement of electricity duty in key export-oriented sectors. As part of its Export Promotion Campaign, the Government could also consider setting up Export Awards, establishing a brand equity fund for branding and marketing of products from Kerala, and assessment of the industrial clusters in Kerala for identification of the necessary areas of intervention. The Study also highlights the need for an effective institutional ecosystem in Kerala for promoting exports, and recommends setting up of a Kerala Export Promotion Council under the aegis of the Department of Industries, GoK.

The Study was released by the Chief Guest for the webinar, Dr. K. Ellangovan, Principal Secretary, Department of Industries & Commerce and NORKA, Government of Kerala. Speaking on the occasion, Dr.Ellangovan highlighted the efforts taken by the State Government to support exporters in the State, and outlined the future endeavours of the Government of Kerala.

David Rasquinha, Managing Director, Exim Bank, in his welcome address, noted that international trade is at the focal point of the narratives of “Atmanirbhar Bharat” and “Vocal for Global”, and there is a need to coalesce efforts at all levels of governance to prepare the domestic industry for achieving these objectives. He also apprised the participants about the multi-layeredengagement of Exim Bank for financing, facilitating and promoting exports at the state level.