Saturday 04 / May / 2024
New Delhi: In the recent years, Global trade has been affected by several adverse events such as disruptions in global supply chains, geopolitical developments, uncertainties in interest rates, and fluctuations in commodity prices. However, despite these obstacles, India has proven to be a resilient exporter
According to the World Trade Organization's Global Trade Outlook, April 2024, India has taken proactive measures to implement digital initiatives across various sectors, leading to a significant increase in the export of digitally delivered services from 2019 to 2023.
This sector has experienced remarkable growth, with exports reaching USD 257 billion in 2023, doubling from USD 124 billion in 2019. As a result, India occupies a prominent place among top five exporters of digitally delivered services, highlighting its importance in the global market.
Additionally, India holds the 7th position in terms of the export of commercial services, solidifying its position as one of the top 10 exporters globally. India is ranked 17th among the top 20 exporters in World merchandise exports for the year 2023.
India's export dynamics highlights substantial growth in exports from 2001-02 to 2022-23. Total exports have accelerated from USD 44 billion in 2001-02 to USD 776 billion in 2022-23, accounting for 22% of Gross Domestic Products (GDP) at current prices. The post-pandemic years have witnessed significant resilience as the value of exports soared to USD 776 billion in 2022-23 from USD 497 billion in 2020-21, displaying almost a double-digit growth.
Moving forward, the government's continued focus on calibrated reforms to facilitate exports will be crucial in achieving the target of USD 2 trillion by 2030 of which USD 1 trillion will come from merchandise exports and one trillion from services exports.
Moreover, as of February 2024, the total exports for the current financial year (April2023-Feb2024) stands at USD 709 billion, which is 0.8% higher than the total exports for the same period (April 2022-Feb2023) in FY 2022-23 which were at USD 704 billion during the same period. Exports are expected to make a new highs in 2023-24 too.
India’s top ten export items in the recent years include mineral fuels, natural and cultured pearls, electrical machinery, nuclear reactors, organic chemicals, vehicles other than railways, pharmaceutical products, cereals, iron and steel and articles of iron and steel.
The top ten export destinations in the recent years include USA, United Arab Emirates, Netherlands, China, Bangladesh, Singapore, UK, Saudi Arabia, Germany, and Indonesia. The major sources of imports include China, UAE, USA, Russia, Saudi Arabia, Iraq, Indonesia, Singapore, Korea, and Australia.
India's export growth remains robust despite the challenges posed by the Red Sea disruptions. The country has demonstrated resilience in navigating through troubled waters by implementing effective mitigation strategies.
With a tussle-mitigating approach, India is able to sustain positive export growth in 2023-24 too with increased demand for India’s exports in the global markets. Despite the significant role of the Red Sea route in connecting Indian companies with markets across Europe, North America, North Africa, and parts of the Middle East, India remains resilient.
Recently, RBI released Gross bank credit data, wherein export credit has hit a highest level in the past 12 months by the end of January 2024. Despite the challenges posed by the Red Sea, Indian exporters are demonstrating resilience and adaptability, capitalizing on renewed international demand for Indian goods. This surge in export credit reflects the financial sector's confidence in supporting exporters, thereby facilitating their expansion into global markets. The MSMEs are particularly benefiting from the credit expansion by the banking sector. Many MSMEs are becoming export oriented and connecting significantly with the global value chains.
In conclusions, India has emerged as a beacon of hope in the midst of the turbulent and unpredictable global trade landscape. India has emerged one of the resilient exporters in the global trade trajectory. The future holds a promising outlook for India's exports growth trajectory with the support of proactive policy environment and increasing ease of doing exports.
The focus of India's new Foreign Trade Policy (FTP) 2023 on Duration, Dynamism, Decentralization, Direction, and Disaster proofing, aims to create a favorable environment for exporters in the global markets. The new FTP is strengthening India's export capacities, taking into account the size of the Indian economy and its manufacturing and service sectors.
By promoting and developing each State to integrate with global trade, the FTP 2023 aims to enhance India's competitiveness in global markets. The dynamic policy environment coupled with the zeal of exporters to become more and more competitive will enhance the overall exports trajectory to the much-much higher levels in the coming times.
