The Editorial Analysis: Heartening Milestone

Exports from India UPSC: Relevance

• GS 3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

Export sector in India: Context

• According to the recently released data from Ministry of Commerce and Industry, India’s exports for the first time crossed the USD 400 billion mark in a fiscal year.

Heartening milestone: Tone of the editorial

• The article talks about the relief brought by the news in this pandemic driven economy. Also, the article talks about the challenges that need to be dealt, to further consolidate our position in the global trade.

संपादकीय विश्लेषण: हर्टेनिंग माइलस्टोन

Export 400 billion dollar: Remarkable achievement

• Given that the economy is still struggling to recover from the bruising impact of the COVID-19 pandemic, the record merchandise export brings the much-needed cheer.
• It is laudable that the key value-added sectors of engineering goods and apparel and garments have done well this year.
• The provisional data from Ministry of Commerce revealed that the engineering goods, in particular, have registered almost 50% year-on-year growth, while ready-made garments saw an increase of 30%, in the April-February period.
• Importantly, petroleum products were the standout performer as the global surge in oil prices lifted the dollar value of overseas shipments of goods produced at India’s refineries by 150% over the first 11 months of the fiscal.
• The fact that the export growth has been achieved against the backdrop of persistent logistical challenges, including container shortages and port congestion that have pushed up freight rates, is laudable and reflects the concerted effort made by the government in coordination with industry and the country’s overseas missions.
• The role played by India’s embassies and envoys needs a special mention in exploring new opportunities for Indian products, and if the current momentum in exports is to be sustained in the coming years, the diplomatic corps will need to enlarge their role in trade promotion.

Export sector challenges

However, the cheer should also be followed by the acknowledgement of the challenges faced by the domestic industries.

• Imports have outpaced exports this year, almost doubling the trade deficit in the April-February period to more than $175 billion. The gap is even wider than the pre-pandemic year of 2019-2020
• While global inflation in commodity prices contributed to enlarging the value of both exports and imports, the fact that project goods were the only item of import, among the 30 broad categories listed by the Ministry that contracted over the 11-month period, is also cause for disquiet.
• The lack of overseas purchases of capital goods for new projects is a clear indicator that private Indian businesses are still wary of making fresh investments given the lack of momentum in personal consumption.
• The war in Ukraine and sanctions on Russia is now posing fresh problems for exporters seeking to ship goods to not only these countries but other markets in Europe as well.

Exports from India: Way forward

• Policymakers must go beyond stopgap measures such as enabling rupee-rouble trade and expedite ongoing negotiations on the raft of free trade agreements so as to at least help lower some of the tariff walls.

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