DHL launches Indian trade confidence index
The WTO deadline is expected to have a major impact on exports from India, so DHL Worldwide Express has launched the DHL Trade Confidence Index, which will measure the attitudinal outlook of exports including the expectations and drivers for export expectations.
Reported to be the first of its kind for international trade in India, it is a measure of the perceived momentum of exports and will serve as a benchmark for future expectations, according to Mr Ramesh Natarajan, Head-Marketing, DHL Worldwide Express (I) Ltd.
“The exports business is a very volatile market – things can change dramatically almost overnight, so you need a gauge of what exporters think will happen from quarter to quarter,” Mr Natarajan told Business Line. “And we want to enable and facilitate trade.”
The index and the methodology were developed by leading economist Dr Bibek Debroy, while Indica Research did the fieldwork and research.
The quarterly index is based on interviews with over 950 individuals in various export organisations – large, medium and small – across six centres.
The sectors covered include apparel and textiles, agro products, carpets, engineering goods, gems and jewellery, handicrafts, leather and leather products, pharmaceuticals and software.
“Much of the exports business is based on gut feel, and a lot of investment is made on instinct,” Mr Natarajan said. “So it is important to measure the attitudinal and emotional aspects of it.”
The index is based on nine parameters, including overall order expectations (long-term and short-term), demand conditions, domestic context, macro-economic context (interest rates, credit facilities, economic policies), policy context, EXIM policy context, WTO impact, attitude of US customers (largest trade partner), and impact of non-tariff measures. For each of the parameters, a net positive score was calculated; scores of various parameters have been averaged to arrive at the Domain composite score, and the net score has been indexed to 100.
It was based on the 11-year-old DHL Exporters Confidence Index in the UK, which was acknowledged by the Government and the industry as a benchmark indicator for the export industry, Mr Natarajan said.
The Indian index has been designed according to the specific needs of the Indian industry, economists and academics, and would be made available to about 2,500 of DHL’s top customers, export organisations and universities, he added.
“Since we provide logistics solutions to various companies across sectors, we do have a finger on the pulse of the market,” Mr Natarajan said.
Besides the index, which is based more on the emotional aspect of the business, DHL, in association with Dun & Bradstreet, will also publish a monthly export outlook paper, which will tell the actual numbers.
