After experiencing a strong recovery from the COVID-induced slowdown in 2021, Indian exports are expected to extend the growth story until the New Year also thanks to increased demand in global markets, an increase in domestic manufacturing in due to incentive programs linked to production and the implementation of certain interim trade pacts. Expectations of positive growth in the country’s exports are also supported by the outlook for the World Trade Organization (WTO), which forecasts a 4.7% increase in the volume of world merchandise trade in 2022.
Exporters believe outbound shipments would break through the $ 400 billion mark in this fiscal year based on current momentum and could reach $ 475 billion in 2022-23. However, global growth and demand will also depend on the ability of countries to contain COVID-19 and the new Omicron variant through mass vaccination around the world, they suggest.
According to a Reserve Bank of India survey released in September, exports of software services, including services provided by foreign affiliates of Indian companies, amounted to $ 148.3 billion in the fiscal year ended. on March 31, 2021. This represents more than 145.3 billion USD. The world’s largest exporter of oil, Saudi Arabia expects oil sales in 2021. With the world’s largest engineering population, the history of software exporting began about four decades ago and has enormous potential to go even further. But software exports are only part of India’s export-driven growth, which is gaining momentum.
Commerce Secretary BVR Subrahmanyam said the world now respects India as a trusted global trading partner and the country’s exports are increasing to regions such as the Middle East, Arica and countries of South America, in addition to the traditional destinations of India. “Intense review and surveillance at macro and geographic levels helps to find new areas of trade relations. Various measures to improve the ease of doing business, incentive programs like LIPs, streamlining of tariffs facilitate trade like never before, âhe told PTI. .
To stimulate exports, the government has taken several measures such as the notification of RoDTEP rates (remissions of duties and taxes on exported products) and the release of 56,027 crore rupees against pending tax refunds from exporters and measures. to promote ease of doing business, added the secretary. Subrahmanyam said that a series of measures taken by the central government and the resilience of Indian exporters have helped to achieve record export growth so far.
According to another senior official, the Ministry of Commerce is working on the new foreign trade policy (FTP) and is aggressively negotiating free trade agreements (FTAs) with key trading partners including the United Arab Emirates, the United Kingdom United and Australia, and these measures would help set records. export growth “next year too”. The center implemented a series of measures to promote exports of goods and services, including the introduction of RoDTEP and reimbursement schemes for state and central levies and taxes (RoSCTL), the launch of the platform common digital form for the certificate of origin to facilitate trade. and increase the use of FTAs ââby exporters, promoting districts as export hubs by identifying products with export potential in each district and removing bottlenecks, and promoting ease of exportation. to do business.
The recently introduced PLI programs will also support growth in the new year, especially in the mobile phone, electronics, drug and pharmaceutical sectors, as the additional production will also lead to additional exports. According to the Director General of the Federation of Indian Export Organizations (FIEO), Ajay Sahai, everything will depend on our ability to contain Covid-19 through mass vaccination across the world and create the required capacity.
This will decide whether the country should seek growth of 15-20% or even more and considering the emergence of new variants and challenges on the supply side at this point, “we would like to be a little conservative and aim for an export. from $ 460 billion to $ 475 billion in 2022-2023, “he said. Sahai added that while the demand side of exports should be supported by industry, industry and government should work together to meet the challenges on the supply side.
âRising input prices, skyrocketing freight, and delays in shipments and payments have resulted in the need for additional credit. Unfortunately, additional credit also requires additional collateral from banks. The government could consider giving a boost to container manufacturing in the country as we need a large number of containers for inland cabotage, âhe suggested. As of January of this year, most exports have grown in double digits due to a weak base. In 2020, exports were hit hard by the impact of the Covid-19 pandemic.
The rise in imports of gold and crude oil pushed the country’s imports and widened the trade deficit (difference between exports and imports). The trade deficit hit a record $ 23.27 billion in November. Leading exporter and founding chairman of Technocraft Industries India, Sharad Kumar Saraf, said that as India’s economy recovered at a faster pace, imports were increasing.
“Exports will fare better in 2022 due to the demand for health in global markets. Customers who have left China are turning to India. Programs like PLI will start to bear fruit from the new year.” , said Saraf. Ludhiana-based Hand Tools Association chairman SC Ralhan also said exports would do good in the new year, but the government should take immediate action to contain rising shipping rates and commodity prices.
Export promotion helps a country create jobs, boost manufacturing, and earn more foreign exchange.
(Edited by : Aditi Gautam)