New export strategy must be a result of introspection | Business Standard Column

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The 2015 Foreign Trade Policy Statement said that the government aims to increase India’s exports of merchandise and services from $465.9 billion in 2013-14 to approximately $900 billion by 2019-20

TNC Rajagopalan

The commerce ministry is preparing a vision and strategy document giving a road map for boosting exports of products and services from India. It has given a list of topics to be included in the text, and sought inputs from the trade. The document is expected to be finalised and released by this month-end.

This is not the first time that the government has contemplated such a document, although it is the first time that it has called for inputs from the trade. In fact, the commerce ministry released a Foreign Trade Policy Statement in April 2015 outlining its vision, goals and objectives underpinning the foreign trade policy for the period 2015-2020. That document was reviewed in a hurry in December 2017 retaining most of the original text and features.

The 2015 document described the market and product strategy envisaged and the measures required not just for export promotion but also for the enhancement of the entire trade ecosystem. The vision was to make India a significant participant in world trade by the year 2020 and to enable the country to assume a position of leadership in international trade discourse. The document had six sections, one each on introduction and backdrop, market strategy, product strategy, the services sector, trade ecosystem and trade promotion and infrastructure. It talked of a ‘whole-of-government’ approach to foreign trade policy. It identified actions necessary to attain the vision and goals. The document recognised that trade performance is closely and inextricably linked with overall economic performance and that trade policy has a direct connection with domestic economic policies.

The government now intends to have 10 chapters in its 2023 document, some of which will cover the same or similar ground as the 2015 document. The new chapters include innovation and start-up ecosystem, integrating Nari Shakti into international trade and value chains, and improving trade resilience, i.e., setting up a robust system to deal with unforeseen developments such as the Covid-19 pandemic.

The government has given a brief outline about what each chapter will deal with. The chapter on Nari Shakti would cover initiatives that the government intends to take to encourage women to get into export-oriented businesses. This chapter would highlight gender biases and barriers that become more pronounced when women get engaged in international trade. The chapter on services would deal with the emergence and harnessing of new business models through technology development, artificial intelligence, internet of things, capacity building, and a strong intellectual property regime.

The 2015 Foreign Trade Policy Statement said that the government aims to increase India’s exports of merchandise and services from $465.9 billion in 2013-14 to approximately $900 billion by 2019-20, and to raise India’s share in world exports from 2 per cent to 3.5 per cent. Eight years later, the aggregate of exports of goods and services is less than $700 billion, despite a dramatic rise in the exports of services. Our share of global exports is only around 2.5 per cent. Since 2014, India has become more protectionist, hurting the competitiveness of the downstream industries. India has walked out of regional trading arrangements and thus stayed away from global value chains.

Given the disappointing export performance, a new vision and strategy document will help only if it is a result of honest introspection. It should avoid self-congratulatory and unnecessary platitudes.

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