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Source– The post is based on the article “Our free trade agreement with Australia is unique in its details” published in the mint on 28th November 2022.
Syllabus: GS3- Indian economy
Relevance: economic reforms for more growth
News- the article explains the steps taken by the Indian government to increase the trade potential of firms.
What are initiatives taken by the Indian government to boost trade?
More exports- India has more than 2 million firms that produce quality products and services. But, less than 100000 of these firms are engaged in exports.
There is a need to increase the number of firms doing commercial exports. District hubs scheme can push more firms to export their products.
Flexible labour laws– Labour laws apply to only formal sector workers. It constitutes just 8% of all workers. India has introduced four labour codes. It will help to set up many new units and increase the employment opportunities.
Support for manufacture of high-tech products– India’s share in global export of high-value items is low. Our export share in machinery is 0.9% and electronics is 0.4%.
The government has introduced the production linked incentive scheme to make India a major production centre of these products. It will lead to more exports.
Enhanced efficiency of commercial courts– Courts delay in settling commercial disputes is stunting industrial growth. Weak contract enforcement is one of the reasons for poor industrial growth.
The government has made several interventions like introducing new laws and automating courts. These are yielding results.
The introduction of WTO-compatible export schemes– Government has abolished export schemes that are not compatible with rules of WTO. The most important one was the Merchandise Exports from India scheme.
Improved product quality through regulation– Many Indian products fail quality tests due to traces of pesticides, pathogens etc. India needs to redesign its quality assurance framework to help firms reach higher standards.
The government has issued Quality Control Orders and Technical Regulations for many products. It will reassure t5he quality of these products.
Service sector diversification– The IT sector dominates India service exports. The government is working to diversify exports in 12 service sectors under Champion Service Sector initiative.
