Our e-com opportunity to raise export earnings

What is the news?

The finance ministry’s report on Indian economy for July indicates that Indian economy is witnessing a revival. Recent rise in consumer demand among the rich nations is providing an opportunity to Indian exporters to expand their market.

Parameters indicating economic revival

1. Increase in Purchasing Manager’s Index for manufacturing sector – due to increase in demand as a result of ‘revenge shopping’
   • The term ‘revenge shopping’ means spending excessively after a period when one has had limited opportunities to spend.
2. Increase in GST collection above Rs. 1 trillion
3. Rail freight movement carried goods of 112.7 million tonnes which is highest ever achieved target
4. Other indicators like automotive sales, highway toll, e-way bill generation also reflect a revival of the economy.

Opportunity in exports

• India’s recent performance at ports is impressive. Our export shipment has gathered momentum and if this momentum sustains we can achieve our target of $400 billion in merchandise exports for the year 2020-21.
• Even WTO expects the global trade in goods to rise by 8% this year from -5.3% growth in last year.
• Fiscal stimulus in America is offering a robust market for exporter. Increase in household savings in America due to this policy creating a room for expenditure boom in the economy which can have a multiplier effect on other economies too

What needs to be done?

• Removing barriers to our global competitiveness – like high tariffs on inputs, duty inversions of intermediate and ready to use products need to be removed.
• Empowering e-commerce platforms – since there is increase in online spending as a fallout of covid we need to encourage and empower e-commerce platforms to reach richer markets.
• Improving the supply quality and back end operations (backward and forward linkages) for e-commerce entities

Terms to know

• Purchasing Manager’s Index