India’s exporters and other stakeholders in the export ecosystem appear to have taken Commerce Minister Piyush Goyal’s words to heart. Commenting after the Union Budget earlier this month, the Minister had said that India’s exports and exporters need to become less subsidy-reliant and focus more on capability-building to become internationally competitive. Accordingly, the Ministry even announced that it was seeking stakeholder comments on the upcoming Foreign Trade Policy 2020-25. Leading industry body Confederation of Indian Industry (CII) has revealed its recommendations, highlighting 31 key export areas/commodities with high growth potential. Himachal Pradesh Chief Minister Jai Ram Thakur also chimed in separately, stating that exports would prove to be a crucial component of the country’s future economic growth. While the WTO has raised warnings about the rise of protectionism and restrictive trade policies around the world, India’s share in global merchandise exports has steadily risen, with nearly half of this contribution coming from MSMEs. India’s exports and exporters are clearly gearing up for a big push in the coming weeks and months, and one hopes that policymakers and other stakeholders are taking note and doing everything they can to support this development.
Trade Update
27th July
# 35
In a study on ways to boost merchandise exports, the Confederation of Indian Industry (CII) has identified 31 items with high potential for exports such as women’s apparel, drugs, cyclic hydrocarbons, and furniture. “A targeted export strategy that identifies and boosts the right products is imperative for achieving double-digit export growth. An export strategy assumes greater significance given a rapidly changing global trade landscape, shifting of global value chains and new free trade agreements, including mega-trade agreements. CII has analyzed and identified select export items where India can become a leading exporter and offers recommendations for boosting such products,” said Chandrajit Banerjee, Director-General, CII, in an official release.
Exporters are playing a crucial role in improving the economic growth and their contribution can be decisive in making India a five-trillion economy, as has been envisaged by the government of India. Chief Minister Jai Ram Thakur said this during the regional award ceremony of the Engineering Exports Promotion Council of India (EEPC) in Shimla on 20th July. The CM, who was the chief guest, said: “The state government has provided 57 bigha land for setting up a regional center of the Indian Institute of Foreign Trade in Shimla that will help in identifying export potential.”
Member countries of the WTO have imposed 38 new trade-restrictive measures during October 2018 and May 2019, mainly through tariff increases, import bans, and export duties. “Trade flows hit by new restrictions implemented by WTO members continued at a historically high level between mid-October 2018 and mid-May 2019,” according to a report of the World Trade Organisation (WTO). These measures, it said, are suggesting that the precarious situation in global trade will persist.
Amid robust economic reforms, especially reforms in the trade policy environment during the last few years, India’s presence in world merchandise exports remains intact and an uptick has been observed in India’s share in world merchandise exports from 1.60% in 2015 to 1.68% in 2018, said industry body PHD Chamber of Commerce and Industry in a press statement issued on 23rd July. Value of India’s merchandise exports increased by 22% from US$264 billion in 2015 to US$323 billion in 2018, which is the second-highest after the Netherlands.
The share of exports of products related to India’s micro, small and medium enterprises (MSMEs) during the year 2018-19 stood at 48.10% as per the information from the Directorate General of Commercial Intelligence and Statistics, MSME Minister Nitin Gadkari said in a written reply in Rajya Sabha on 22nd July. The jump in the share has been impressive from the preceding year (FY18) when MSME exports contributed only 7.5% to total exports.