In a challenging global environment – the pandemic, the Russia-Ukraine war, and disruption in businesses across the globe – India has been giving a remarkable performance, and India’s exports are breaking records amid global headwinds.
As we celebrated the 75th Independence Day, India’s exports of goods and services soared above $750 billion through the adoption of better technology, greater competitiveness, and a focus on quality in the industry.
India’s merchandise exports were recorded at $422 billion in 2021-22, way above the previous record of $330 billion. The services exports also soared to $254.53 billion, putting Indian exports in a different league.
As per the Minister of Commerce and Industry, Piyush Goyal, the foundation of such spectacular growth in Indian exports was set by India’s Prime Minister in 2021 when he, in an interaction with the heads of Indian missions abroad and other stakeholders in India’s foreign trade, asserted a strong message of adopting technology, becoming competitive and focusing on quality. He also urged the government and exporters to walk shoulder to shoulder, said Goyal, who holds continuous interactions with exporters in the spirit of the PM’s message.
What is supporting India’s exports?
Lower Inflation: Inflation often leads to a reduction in exports as goods and services get dearer in the international market. However, the Government of India, in a strategic move last year, controlled domestic prices by restricting or discouraging exports of various products and commodities, including wheat, sugar, rice, iron ore, steel, and petroleum. This steamrolled domestic supplies, helped customers & small businesses and shielded them from volatility. This forward-looking approach has kept India’s inflation rate much lower than the Western countries. Although merchandise exports at the time could have done even better, it is now reaping the fruits.
Ease of Doing Business: The facilitation of ease of doing business across sectors, has supported India’s exports and overall economic growth. India’s ranking for ease of doing business has improved exponentially from 142 in 2014 to 63 in 2022. With ease of doing business being promoted by the Make in India initiative, more and more small businesses are now thinking global. Also, it is encouraging and helping attract many large organizations to set up manufacturing and export from India.
Gati Shakti National Master Plan: Building a world-class infrastructure eases the logistical challenges, increases efficiency and reduces the costs of operations. The Government of India has been on a mission to rapidly develop expressways, rural roads, ports, and air infra through various initiatives that help all businesses and boost exports. The PM Gati Shakti National Master Plan furthers these efforts by not only identifying new projects but also looking into the successful execution and implementation of existing and planned initiatives, and creating multi-modal connectivity across the nation.
Encouraging Exports in New Sectors: Moving beyond the traditionally exported commodities, the Indian government is now also promoting the export of goods from new or ‘sunrise’ sectors to enhance Indian exports. India has now enhanced its defence exports, which include personal protective items, offshore patrol vessels, ALH helicopters, SU Avionics, Bharati Radio, Coastal Surveillance etc. These exports rose to a record ₹15,920 crore in 2022-23, and are poised to grow exponentially in the years ahead. Also, traditionally a large importer of toys, India for the first time became a big exporter of toys recently. The PM observed this as a “clear manifestation of India’s talent and enthusiasm towards Make in India”.
With a focus on good quality, India’s electronic goods exports with leading companies like Apple, and services exports rooted in with PM’s Digital India initiatives, have also increased. Apart from this, the rise in quality standards, gaining access to new markets with trade deals, the Jan Vishwas Bill, single-window Customs clearance, and PM MITRA textiles parks, are also helping Indian exports grow.
Indian exports are growing rapidly and are poised to set new records despite the challenges and gloomy international trade, as the growth engines of the Indian economy continue to be robust. In that direction, Goyal is optimistic about achieving a $1 trillion export of goods and services by 2030.