Policy For double digit GDP growth, focus on boosting exports

Indian exports did reasonably well in 2018-19 reaching a new milestone of $331 billion in merchandise and $204 billion in services. However, contraction in global demand, increasing protectionism and high volatility in currency and commodities have added to uncertainties casting their shadow on growth.

 

With the ongoing US-China trade war, each revised forecast for the global trade indicates further decline over the previous ones. The ASEAN economies may suffer the most, being exports-driven. The slowdown of China and its focus on domestic consumption will also have serious ramifications for them. Commodity-exporting countries in Latin American and the CIS countries may be adversely impacted as the demand and consequently the prices are likely to come down.

 

India, with huge domestic market, is likely to face less headwinds. On the contrary, the escalation of tariff between US and China has provided us a great opportunity to further increase our exports. We need to encash on it by expanding our exports and, more importantly, adding capacities, where it doesn’t exist, in minimum time so as to gain from the situation. The time is ripe to negotiate with China to get more market access, while simultaneously moving to value-added exports in our basket.

 

This is the time to attract export-led investment both from US and China as numerous companies are willing to relocate to keep their exports momentum bypassing increasing tariff. Such investment will not only bring technology but will also integrate India into global value chain where major trade is happening. As a medium-term road map, our focus should be on high and medium technology exports to build on huge professional manpower and our R&D capabilities.