Western Europe and the US accounted for more than half of global production,
with India’s share reduced to only 4.2%.
is changing today. Developing Asia accounts for 29% of global GDP and 32.5% of
global trade. India recently became the sixth-largest economy in the world and,
according to the International Monetary Fund, India would be the
fastest-growing large economy in the world during 2018-19. This growth in
output stems largely from domestic demand, which is a significant departure from
the export-led growth strategy followed by several Asian economies.
Scope of export-led growth strategy in India
growth has been largely driven by domestic demand, exports are expected to play
a prominent role in scripting India’s future growth story, especially in light
of the revival in global demand.
Some of the
crucial themes for the export strategy would be demand-based export
diversification, alleviating structural deficiencies, easing supply-side
constraints, and integrating the country in global value chains (GVCs).
There is a
need to shift our focus from exporting what we can (or supply-based), to items
that are globally-demanded.
India has limited presence in major trade
sectors like machinery and electronics, which have strong trade-investment
links and a significantly large share in global imports.
exports of machinery and electronics will require integration in GVCs of these
products, which will necessitate measures aimed at trade facilitation,
improvement in business environment, reduction in barriers to trade, and
improvement in logistics.
the need for improvement in logistics, the Government has already started a
wide array of projects including the Bharatmala and Sagarmala initiatives, and
establishing Coastal Economic Zones, which are expected to bode well for
Government is also working towards a national strategy for standardisation to
tackle challenges pertaining to quality and compliance with standards.
and conformance to specific standards and regulations across different
industries could enhance our participation in GVCs.
diversification towards high-value-added products, India also needs to
penetrate new emerging markets. Growing protectionism in the West, larger
financial flows towards developing and middle-income countries, and the rapidly
expanding middle class in Africa, Latin America and Asia mean that South-South
trade relations would increasingly gain importance for Indian exports. Thus,
going forward, strategies focused on increasing access to these markets will be
Asia Growth Corridor shall form a critical element of a market diversification
And access to new trade routes through
projects—such as the Chabahar Port in Iran and the North-South Corridor of
Iran’s Bandar Abbas Port—will improve our access into the markets of Central
Asia and Russia.
India needs to adopt non-price mechanisms for boosting export competitiveness,
in the light of increasing demands to cut back on export subsidy schemes under
the WTO Agreement on Subsidies and Countervailing Measures.
allocation of funds towards subsidy needs to be redirected to create capacity
for value-added exports.
non-price factors like quality, innovation, trade agreements and concessions in
reciprocal exports will form the key tenets for building India’s export
Government is already working on several of the aforementioned aspects of
export promotion, armed with its arsenal of ambitious schemes and policies.
All that is needed now is a swift and
concerted effort to accelerate the implementation and create a conducive
environment for projects to take off. It is time for India to embrace the
export-growth strategy, outsmart the ‘middle-income trap’ and lead the world’s
biggest democracy to its very own ‘Great Leap Forward’.
To put it all
in a simple common man language, on the part of the Government it must take
care of structural upgradation and promote Ease of Doing Business so as to
attract investments, little or large, from the national and international
entrepreneurs and on the part of the trade, commitment with a singular focus on
quality in production and in service leading to integration with the Global