Karnataka is losing out on precious export revenue due to critical gaps in infrastructure, according to a new report, which has laid bare the problems and outlined a road-map for repairing the strategy.
Take the case of cashews. Karnataka is India’s fourth-largest cashew producing state, yet the state doesn’t lead in exports. Reason? Manual processing of the produce which slows down the process.
As a result, the state loses out to countries such as Vietnam, which have embraced mechanisation and sell the produce at a cheaper price in Europe and the US.
This is just one example of how Karnataka is unable to harness its full export potential.
Now, the government wants to get its act together by boosting exports across sectors over the next five years. To enable this, it has readied an ‘Export Strategy’.
Prepared by the Federation of Indian Export Organisation (FIEO), the document aims to make Karnataka among the top 3 exporters of merchandise in the country. Currently, Karnataka accounts for 18.83% of India’s exports.
According to the document, delay in Integrated Goods and Service Tax refunds was severely aecting working capital for exporters and needs immediate attention from the government.
Gunjan Krishna, Commissioner for Industrial Development and Director of Industries and Commerce, said the report looked into problem areas hindering the growth of each sector, while suggesting measures to overcome them.
Gunjan said the state has to focus on improving infrastructure, skilling, minimising logistics, providing warehouse facilities, ensuring international standards for export among others.
Handicras, the document states, has huge growth potential, and recommends the state tie-up with e-commerce platforms for online marketing.
Logistics is another area where the state falls short, according to the report.At Kempegowda International Airport, perishables accounted for 37 percent of the international export cargo. There was an immediate need for cold storage facilities, the document said.
Further, absence of direct flights to high-end markets for cut flowers like Japan and Australia, was resulting in delays at intervening airports, owing to huge losses, it added.
Ajay Sahai, Director General and CEO of the FIEO, said the strategy gave a road-map for sustained growth in exports for Karnataka, focusing on products that were traded in large value globally on the one hand and those which generated employment on the other.
The document identified iron and steel, machinery, instruments and apparatus, aerospace, apparel electrical and electronics, chemical and coee as champion export sectors, carrying an export value worth US$ 10.21 billion with a share of 66% in overall exports from Karnataka.
In addition, it has identified pharmaceuticals, agri and allied sectors, cashew, gherkin, floriculture, marine, plastic, granite, leather and handicras as potential export sectors, which can be boosted with adequate infrastructure support from the state government.