With
the introduction of the Unfair Competition Act in two of the states in US and
others expected to follow suit shortly, it does make tremendous sense to find
out where the Indian exporters are placed in countering the challenges with
respect to exporters from other competing nations.
While
India’s primary area of concern when it comes to competition in manufacturing
related exports is China, there are other nations as well against which Indian exporters
often have to compete across sectors. The moot idea is that if there is a
sector where Indian exporters are better vis a vis their competitors in terms
of IT compliance, then this could be used as an advantage thus helping in an
increase in business opportunities. On the contrary, if India’s competitors in
a sector are already more IT compliant than India, then immediate measures have
to be taken to prevent market erosion.
Let’s
explain this with an example of leather which is one of the major traditional
export items from the country. Leather and leather products are very important
export items from India. India’s competitors apart from China are Singapore,
Switzerland, Italy, Malaysia, Thailand etc. While the IT piracy rate in India
is 69%, that of its competitors are China – 82%, Singapore – 37%, Switzerland –
25%, Italy – 49%, Malaysia – 59%, Thailand – 78%. China, Thailand and Malaysia
are the major contributors to global exports in leather in terms of both value
and volume. If Indian exporters and manufacturers can successfully transform
their IT compliance policies favoring more genuine software, India could use
this to their advantage in taking away business opportunities away from China,
Thailand etc which are much poorer in terms of compliance. However, if India
fails to do this quickly enough, other more IT compliant countries such as
Singapore, Switzerland, Italy etc. will take away all the business
opportunities.
UCA
brings similar threat to other SME predominant sectors including chemicals,
pharma, textiles, automobiles and leather in almost all the competing suppliers
in the US.
Source: www.bsa.org & ITC, 2013.
Indian exporters and
manufacturers therefore need to increasingly implement more modern and value
added technology in the process of manufacturing and evolving innovative
products along with the usage of genuine IT. This will help in meeting the
growing competition in the international market on one hand and reap UCA
benefit in the US on the other.
