India poised to achieve Furniture export target of USD 1 trillion by 2030
More than 20 trade agreements are now being negotiated, including those with the United Kingdom, Canada, the European Union (EU), Australia, the United Arab Emirates, and the Gulf Cooperation Council (GCC) countries, all of which must be implemented swiftly.
Service exports in the year 2000 were at $10 billion, while merchandise exports stood at $45 billion. In 2015–2016, services exports rose to $144 billion, while goods exports rose to $266 billion. In 2021, service exports rose to $206 billion.
To have a 5% share of global exports in 2030, India must grow at a 14% CAGR between 2022 and 2030, representing an 11x increase over the previous year. India should connect closely with global value chains and seek foreign direct investment inflows in its major sectors as part of a strategy to achieve $1 trillion in merchandise exports.
With robust export potential and modernization of manufacturing, India's woodworking enterprises can strengthen their standing among the world's leading manufacturers.
Exporting contributes significantly to the improvement of the country's economy, production level, salaries, wages, and standard of living, as well as the creation of new jobs. In comparison to other industries, the furniture export-import trade is currently one of the most developed.
Nearly 60% of India's overall furniture export sector is made up of wood furniture. The most popular exports from India are statues or complex designs on various art pieces. When it comes to India's priority list of enterprises when it comes to foreign trade and economic policy, the export business is at the top of the list. Because this sector has a large export potential, modernising it with machines and technology will aid in its expansion. In India, domestic demand for furniture is expanding, which is boosting the organised industry.
"International Furniture Park" strides towards strengthening India's exports.
A first in the country, an "International Furniture Park" at Tuticorin is an export oriented initiative, and this would drive the industrial growth of the southern regions of the state. Schemes have also been devised to encourage exporters to produce value added products.
The Tamil Nadu government has signed memorandums of understanding for 24 projects worth Rs 2,120.54 crore. Exports should reach $100 billion by 2030. The Micro, Small and Medium Enterprises Trade and Investment Promotion Bureau (M-TIPB) of the Tamil Nadu government has signed an agreement with Flipkart/Walmart to promote e-commerce among MSMEs in the state through a supplier development programme.
M-TIPB and the Indo-German Chamber of Commerce have signed a Memorandum of Understanding to facilitate engagement between MSMEs in the state and enterprises in Germany. For MSMEs in the state, the MoU will enhance links, interaction, technology partnership programmes, and export prospects.
An official announcement stated that 14 MoUs were signed on behalf of the Industries Department with 100 percent export-focused firms, with a total investment of Rs 1880.54 crore and job prospects for 39,150 people. Another ten Memorandums of Understanding were signed on behalf of the MSME Department, totaling Rs 240 crore in investment and generating employment for 2,545 people.
The government also plans to build two "Export Enclaves" with world-class infrastructure amenities for exporters in Manallore and Tuticorin. It has designated ten export centres where it plans to support export-related shared infrastructureprojects by reimbursing 25% of the project cost, up to a maximum of Rs 10 crore per hub. Chennai, Coimbatore, Hosur, Kancheepuram, Tirupur, Karur, Madurai, Ambur, Tuticorin, and Pollachi are among the ten locations selected.
Investments in compliance with trade agreements:
Multinational businesses must be encouraged to build up a production base in India to improve the country's presence in global value chains, as investment-led exports are a crucial component of export capabilities. Exporters should seek government support in the form of faster clearances and better exchange rates in the future so that they may become better facilitators or enablers.
The rates under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme will be expanded to all sectors and aligned with taxes and additional costs that exist in the production ecosystem. SEZ and EOU exports should be included in the scheme and several proposals are made to improve the efficiency and efficacy of the Advance Pricing Agreement programme, as well as to address transfer pricing difficulties, reduce litigation, and give tax certainty for multinational corporations.
Establishing offices in important markets and assisting buyers in connecting with Indian businesses, particularly small and medium-sized businesses (MSME). India's merchandise exports reached $292 billion in January-December 2021, up 43 percent from the previous year. The Indian wood industry is among the biggest export contributors. With such growth and the government and industry working together, India's export efforts can be bolstered, making it a worldwide manufacturing powerhouse.
Key factors for the growth of the furniture sector in India.
• Good Supply Chain Management
• Cost Minimisation
• Brand Management
• Customisation of furniture
Cluster-based development would help these players synergize their existing resources and provide opportunities for them to acquire technology, access capital, upgrade skills, encourage indigenous design, and benefit MSMEs units by allowing them to handle large orders or meet the needs of international buyers.
Furniture Industry Global Outlook
China is the market leader, but in terms of quality and unit pricing, it lags behind traditionally strong competitors like as Italy and Germany. Lower-income countries, such as Poland and Vietnam, are also posing an increasing threat. Furthermore, China is now confronted with more unfavourable macroeconomic conditions, including growing costs, declining international demand, a technology imbalance, and expanding trade barriers. The present epidemic will energise their export position even more, as COVID 19 has a significant impact on these economies.
The furniture business in Europe is being confronted with a number of economic, regulatory, and environmental difficulties. Global competitiveness is intensifying, with manufacturing expansion in emerging countries, improved logistics, and lower international trade barriers putting pressure on EU-based businesses. Increased demand for low-cost things makes it difficult for enterprises that focus on long-lasting and high-quality products to compete in the domestic market. Furthermore, rising raw material, labour, and energy costs within the EU are putting a strain on business as usual. New techniques and out-of-the-box thinking, such as outside investments and joint ventures, are undoubtedly one of their favoured solutions for dealing with these existing dangers.