Higher exports are strongly correlated with the rapid growth story of the national economies. Spectacular economic growth of China, South East Asian countries are due to boost in their exports. With the goal of becoming USD 5 trillion by 2025, boosting exports of merchandise and services is critical driver of the economic growth. Economic Survey 2018-19 says, “Exports must form an integral part of the growth model because higher savings preclude domestic consumption as the driver of final demand”. Modi government has aim to work towards doubling the total exports. Although, US-China trade disputes have created new challenges, there is room for increasing India’s share in global exports. In this context, Modi government has proactively taken several steps for promoting exports.
Modi government aims to double the farmers income by 2022. Growth in exports of agricultural goods will certainly add to the incomes of the farmers. Hence, Modi government approved India’s first ever Agriculture Export Policy in December 2018 to double the agriculture exports value to US$ 60+ billion by 2022. Outlay of Rs. 206 Crores for 2019-20 has been approved for its implementation. “Transport and Marketing Assistance” (TMA) scheme has been launched for mitigating disadvantage of higher cost of transportation for export of specified agriculture products.
Gems and Jewellery
India is one of the largest exporters of Gems and Jewellery. It has 13% share in the India’s commodity exports and provides employment to over 4.5 million people. Resolution of various issues of the sector such as removal of the requirement of paying IGST on re-import of goods which were exported earlier for exhibition purpose/consignment basis have helped the sector to be competitive in global market. Further, Modi government enabled banks/nominated agencies to release bank guarantee of jewellery exporters, who fulfil export obligation, by allowing partial discharge of bonds executed by nominated agencies/banks for import of gold to be supplied to jewellery exporters.
Funds for Export Support
Infusion of capital of Rs. 389 crore in to Export Credit Guarantee Corporation (ECGC) and grant-in-aid of Rs. 300 crore to National Export Insurance Account (NEIA) trust supports exporters in challenging markets helps to provide cost effective export financing.
Logistics and Infrastructure
Logistics Division was created in the Department of Commerce to coordinate integrated development of the logistics sector. “Trade Infrastructure for Export Scheme (TIES)” was launched with effect from 1st April 2017 to address the export infrastructure gaps and creating first and last mile connectivity. India’s rank in World Bank’s Logistics Performance Index moved up from 54 in 2014 to 44 in 2018.
Promoting Ease of Doing Business
Certificate of Origin shows that goods in a particular export shipment are wholly obtained, produced, manufactured or processed in a particular country. It is required by many countries to ensure legality of exports, allows products to clear customs smoothly. Common Digital Platform for Issuance of electronic Certificates of Origin (CoO) for the exporters was launched by Modi government easing the documentary burden on the business. It has helped reduce “Time to Export”.
Special Economic Zone Reforms
SEZ (Amendment) Act 2019 enable any entity to set up a unit in SEZs, including Trusts which will help boost investments and create new export opportunities. Also, provision of better facilities for employees such as crèche, gymnasium, cafeteria etc. for their exclusive use will improve ease of doing business and consequent exports. To improve the competitiveness of SEZs steps taken by the Modi government include digital online processing platform called “SEZOnline” was introduced and integrated with ICEGATE system; allowing dual use of infrastructure in the Non Processing Area (NPA).
For the year 2018 for service sector, India’s share in global exports was 3.5 % and imports was 3.2 %. Modi government identified 12 Champion Services Sectors for focussed attention which include IT & ITeS, tourism, medical value travel and audio visual services.
Launch of Government eMarketplace (GeM)
It was set up as the National Public Procurement Portal for facilitating completely online and transparent system for procurement of goods and services offering end-to end solutions by Government organizations. In about two years of its formation, GeM is already Government’s biggest e-marketplace.
Addressing Stakeholder Concerns
Merger of Council of Trade and Development and Board of Trade is providing a common platform for addressing stakeholder concerns. This platform comprises representatives of stakeholders such as industry, central and state government, banking and finance.
As a result, despite major downturn in the face of the global slowdown, merchandise exports for the year 2018-19 reached USD 330.07 billion, the highest ever, surpassing the earlier peak of USD 314.4 billion achieved in 2013-14. India’s total exports surpassed USD half trillion (500 billion) mark in 2018-19, for the first time. India’s Ease of Doing Business Rank on parameter ‘Trading Across Borders’ jumped from 126 in year 2014 to 68 in year 2019.
Further, other series of measures in pipeline are expected to stimulate exports growth of India. Various recommendations of the High Level Advisory Group (HLAG) , constituted by Modi government in September 2018, for boosting India’s share and importance in global merchandise and services trade are under active consideration of the government. Labour reforms through Industrial Relations Code Bill , labour welfare measures will enhance competitiveness of Indian economy and boost exports.