{"id":187678,"date":"2022-06-01T21:15:51","date_gmt":"2022-06-01T15:45:51","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=187678"},"modified":"2022-06-01T21:17:55","modified_gmt":"2022-06-01T15:47:55","slug":"opinion-how-trade-can-boost-indias-growth","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/opinion-how-trade-can-boost-indias-growth\/","title":{"rendered":"Opinion: How trade can boost India\u2019s growth"},"content":{"rendered":"\n

News<\/strong>: India\u2019s exports have reached $418 billion in FY 2021-22. These figures have surpassed the pre-pandemic level of $331 billion in FY 2018-19.<\/p>\n

Status of India\u2019s Exports<\/span><\/strong><\/p>\n

National<\/strong><\/p>\n

– Total merchandise trade, including imports of $610 billion, amounts to $1.28 trillion for FY 2021-22.<\/p>\n

State-wise statistics<\/strong><\/h5>\n

– As per the Export Preparedness Index (EPI) 2021<\/strong> for Indian states, there were wide variations across the states due to high variation in trade policy, business ecosystem, export ecosystem and performance.<\/p>\n

What were the driving forces?<\/strong><\/h5>\n

The government\u2019s proactive policy schemes<\/strong>, such as merchandise exports scheme, duty exemption scheme, export promotion capital goods, transport and marketing assistance scheme have helped the export sector.<\/p>\n

In addition, the RBI\u2019s gold card scheme<\/strong> and interest equalisation scheme<\/strong> and the export promotion council\u2019s market access initiative<\/strong> were also useful.\u00a0<\/strong><\/p>\n

India\u2019s Export Potential<\/strong><\/p>\n

The annual growth rate<\/strong> of India\u2019s exports between 2011 to 2020 is a little over 1%. This is way below 3% and 4.2%, respectively, for China and Bangladesh.<\/p>\n

According to India\u2019s Trade Portal estimates,<\/strong> there are a huge difference in India\u2019s exports potential and actual exports in many sectors, especially pharmaceuticals, gems and jewellery and chemicals.<\/p>\n

India is endowed with a large share of the working-age population<\/strong> for the next couple of decades.<\/p>\n

Importance of India\u2019s Export<\/strong><\/h5>\n

The revival of exports has provided relief at a time when major components<\/strong> of aggregate demand<\/strong> such as consumption and investment had been slowing down.<\/p>\n

These milestones on the trade front<\/strong> are a sign of a rising India<\/strong>. It would certainly accelerate the growth.<\/p>\n

The trade achievements are a sign of growing confidence<\/strong> in the Indian economy.<\/p>\n

The acceleration of merchandise<\/strong> and services exports<\/strong> could potentially make the Indian economy a $5-trillion economy.<\/p>\n

What are the opportunities?<\/strong><\/h5>\n

Many of the manufacturing giants are moving away from the labour-intensive assembly<\/strong> of network products, which offers India an opportunity.<\/p>\n

As the Economic Survey (2019-20) suggests, \u201cassemble in India<\/strong>\u201d, particularly in network products, will increase India\u2019s share in world exports to 6% and create 80 million jobs.<\/p>\n

What are the challenges\/threats?<\/strong>\u00a0<\/strong><\/h5>\n

Despite India\u2019s offering of a big market<\/strong> and cheap manpower<\/strong>, the space vacated by manufacturing giants such as Japan, Korea, Malaysia and China have been captured by Vietnam, Bangladesh, Mexico and Thailand.<\/p>\n

India\u2019s rank in the logistics performance index<\/strong> is 44 while China\u2019s rank is 26 and South Korea\u2019s 25.<\/p>\n

The price competitiveness<\/strong> of India\u2019s exports is lower compared to China, South Korea and others. This is because the unit cost of a container of exports is significantly higher for India compared to others.\u00a0<\/strong><\/p>\n

Way Forward<\/strong><\/h5>\n

It is time to address sector-specific<\/strong> and market-specific problems<\/strong> to fully capitalise on exports across sectors. India\u2019s key strength is in labour-intensive manufacturing<\/strong>.<\/p>\n

India has to increase its participation in global value chains (GVCs). India should capitalise on the \u201cChina+1\u201d strategy<\/strong>, avoid protectionism and inverted duty structures<\/strong>.<\/p>\n

India needs to find out the reasons which caused MNCs relocation<\/strong> to countries like Vietnam, Bangladesh and Mexico.<\/p>\n

Work on institutions<\/strong> facilitating trade, processes for exports and imports and logistics.<\/p>\n

Work upon reduction in trade and transaction costs<\/strong> as well as ensuring reliability and timely delivery, which is important to becoming part of GVCs.<\/p>\n

There are also opportunities arising out of geo-political conflicts<\/strong> and the intention of the world to diversify its supply chain portfolio.<\/p>\n

The states having scores below the national average should usher reforms<\/strong> like reducing red tape and complex laws including taxation.<\/p>\n

The complexities of trade and business<\/strong> can be reduced by recently concluded FTAs with the UAE, and Australia. This will reduce tariffs<\/strong> and give market access.<\/strong> These FTAs may help in streamlining policies. Further, India is negotiating FTAs with the UK, GCC and Canada.<\/p>\n

The government should bring down non-tariff barriers such as administrative fees, labelling requirements, anti-dumping duties and countervailing<\/strong> measures.<\/p>\n

In addition to the merchandise exports, India should focus and diversify its services exports<\/strong> from IT and IES exports to other categories including travel and tourism and business, commercial and financial services.<\/p>\n

Source<\/strong>: The post is based on an article \u201cHow trade can boost India\u2019s growth<\/strong>\u201d published in the Indian Express<\/strong> on 01st<\/sup> June 2022<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

News: India\u2019s exports have reached $418 billion in FY 2021-22. These figures have surpassed the pre-pandemic level of $331 billion in FY 2018-19. Status of India\u2019s Exports National – Total merchandise trade, including imports of $610 billion, amounts to $1.28 trillion for FY 2021-22. State-wise statistics – As per the Export Preparedness Index (EPI) 2021… Continue reading Opinion: How trade can boost India\u2019s growth<\/span><\/a><\/p>\n","protected":false},"author":10328,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[216,10500],"class_list":["post-187678","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-gs-paper-3","tag-indian-express","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/187678","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10328"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=187678"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/187678\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=187678"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=187678"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=187678"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}