REASONS FOR INDIA'S POOR SHARE IN WORLD TRADE

                 India's export performance is poor. Over the years, since Independence, India's share of the world export trade has been very low. At present, India's share of the world export trade is 1%. The share of export of other developing countries of Asia, namely China, South Korea, Malaysia, Singapore and Thailand is much more than of India.
                 There are several reasons for poor performance of India's export trade. The reasons or causes can be broadly divided into two groups, as shown below :

*   CAUSES OF POOR SHARE OF INDIA'S EXPORTERS :-

   I.  Exporter-Related Problems                                  

• Poor Quality 
• High Prices 
• Inadequate Promotion
• Poor Follow-up of Sales 
• Poor Negotiation Skills 

  II.  General Causes

• Poor Infrastructure 
• Presence of Good Domestic Market 
• Documentation and Formalities
• Negative Attitude of Overseas Buyer
• Problem of Trading Blocs

 
I.  EXPORTER-RELATED PROBLEMS :

1. Poor Quality :-
                     One of the main reasons for poor performance of India's exporter trade is due to the poor quality of products. A good numbers of Indian exporters, especially, the small-scale exporters do not give much importance to quality control. Due to problems in quality, the Indian exporters do not get orders from foreign buyers. There are also cases, where Indian goods are rejected and sent back to India by foreign buyers.
   
2. High Prices :-
                     The price of Indian goods is higher as compared to other Asian countries. The price of Indian exports is high due to :
    (i)   Higher value of Indian rupee is vis-a-vis the value of some of the other Asian countries such as            Malaysia, Thailand, Philippines, etc.
    (ii)  Some of the Indian exporters quote higher prices in order to make higher profits per unit sold.
    (iii) The price of Indian goods is also affected by high transaction costs, and documentation        
          formalities.
   
3. Inadequate Promotion :-
                         Promotion is vital for export marketing. However, a good number of Indian exporters do not give much importance to promotion. Apart from advertising, and sale promotion, Indian exporters must participate in trade fairs and exhibitions. But in reality, a good number of Indian exporters are not professional in advertising and sale promotion. They also do not take part in trade fairs and exhibitions, and if they do so, they lack professional approach in handling the visitors at the trade fairs and exhibitions.
   
4. Poor Follow-up of Sales :-
                         There is often poor follow-up of sales. The Indian exporters do not bother to find out the reactions of the buyers after the sale. They are also ineffective in providing after-sale-service. As a result, there is poor performance of India's exporter trade.
   
5. Poor Negotiation Skills :-
                            Indian exporters, especially the small exporters lack negotiation skills. Due to poor negotiation skills, they fail to convince and induce the foreign buyers to place orders. The lack of negotiation skills is mainly due to poor training in marketing and negotiation skills.
   

 II.  GENERAL CAUSES :

1. Poor Infrastructure :-
                            The infrastructure required for export of goods is poor. Due to poor infrastructure facilities, Indian Exporters find it difficult to get orders, and also to deliver the goods at the right time. The poor infrastructure facilities include :
     (i)   Poor port-handling facilities.
     (ii)  Inadequate warehousing facilities.
     (iii) Poor transport facilities, etc.
   
2. Presence of Good Domestic Market :-
                          In India, there is a good domestic market. Sellers find a ready market for their goods within the country. Therefore, they do not take pains to get orders form overseas markets. However, from the long-term point of view, India marketers should look beyond domestic markets, and enter in the export markets.  
   
3. Documentation and Formalities :-
                         In India, there are number of documentation and other formalities. Due to the various formalities, some of the marketers do not enter the export field. Therefore, there is a need to simplify and reduce formalities and documentation work on the part of government authorities.
   
4. Negative Attitude of Overseas Buyers :-
                         Some of the overseas buyers, especially from developed nations have a negative attitude towards Indian goods. They are of the opinion that Indian goods are of inferior quality, and that the Indian exporters provide poor service after sales. Therefore, there is a need to correct this negative attitude through effectively promotion and good marketing practices.
   
5. Problem of Trading Blocs :-
                        Indian exporters are affected due to the presence of trading blocs. There are some powerful trading blocs in the world such as NAFTA, European Union and ASEAN. The training blocs reduce or eliminate the trade barriers on non-members. Since India is not a member of the powerful trading blocs, Indian exporters do face problems to export good to the member countries of the trading blocs.