The changing colour of India’s export basket is giving a cue to the country’s new trade dynamics. One interesting observation noted in the Reserve Bank of India RBI ) first bi-monthly monetary policy statement (MPS) 2018-19, relates to a shift in the country’s exports basket -- a clear swing away from primary and traditional low value-added exports to higher value-added manufacturing and technology-driven items.A comparison of key items of exports between 2011-12 and 2018-19 (April-February) reveals that there has been a significant increase in the shares of chemical and related products and engineering goods, and such a shift has imparted a measure of resilience to export demand in a hostile international trading environment, says RBI’s policy statement issued today.This comes as India’s exports face tepid growth. RBI says against the backdrop of slowing global trade and commerce-inhibiting trade tensions, India’s merchandise exports (y-o-y) moderated during Q2 and Q3 of 2018-19 relative to Q1.Attributing the shift to nothing but a slowdown noticed during the last 5-6 months in chemical items’ exports from China to its major trading partners, Satish Wagh, Chairman, Chemexcil, says, “In recent months, major Chinese trading partners including the EU has raised environment-related concerns (with it) and this development has worked in favour of Indian exporters and India is now being regarded as a stable and quality destination for chemical-based items.”Highlighting that China’s administration has also tightened norms in the wake of the explosion at Chemical factory last month in Yancheng city, in the eastern Jiangsu province that resulted in the death of more than 75 people, Wagh added that the blast - one of the worst industrial accidents in China in recent times, has also shaken the confidence of Chinese suppliers significantly.During Q2, the slowdown in Indian exports was accentuated by a decline in shipments of readymade garments, rice and marine products; in Q3, exports growth was pulled down by gems & jewellery, engineering goods, and meat, dairy & poultry.It is evident that export slowdown is broad-based in nature and impacts most of India’s traditionally strong export segments.Ajay Sahai Sahai, Director General & CEO, Federation of Indian Export Organisations (FIEO), however, believes that for all export profiles of a developing country like India, an equal thrust on both the sunrise sectors and traditional ones should be the way forward.“We need to acknowledge that it’s the traditional sectors that help in creating jobs. Going forward, for securing foreign exchange for the country, neither we can solely depend on traditional sectors, nor solely on sunrise and knowledge-based sectors,” said Sahai, adding that while knowledge-based segments such as IT, Pharma, automobile etc, should be encouraged, a thrust on traditional domains such as gems and jewellery, textiles and leather etc, needs to be equally followed.Riding high on the back of the current dispensation’s policy initiatives such as hikes in the interest equalisation rates for micro, small and medium enterprises (MSME) exports from 3 per cent to 5 per cent as well as measures announced in the Agriculture Export Policy (2018), the RBI hopes it will provide a further fillip to exports.“Under services, software exports rode on the upside of a significant improvement in export revenues of major IT companies in Q3. Optimistic forecasts of global IT spending in the next two years also portend well for the outlook of software exports. Lower outgo under income account also helped in containing CAD in Q3,” said RBI.