India’s share in world trade is way below the potential of the fastest-growing major economy. The country’s share of exports is a meagre 1.91 per cent in the US’s total imports and 0.68 per cent in China’s total imports. The Confederation of Indian Industry has identified growth areas where India has a high potential to produce and export. The value of Indian exports to major markets needs to be increased further for the country to increase its global trade footprint, says a CII report. India’s presence in the top importing nations is below its share in total global trade. India is ranked at 18th among the world’s largest exporters, while it is ranked 11th among importers.
CII has pointed out that among the top three categories of imports — electrical machinery and equipment, machinery and appliances, and vehicles, share of India is not substantial. The industry body has identified where capacities need to be increased. These items are motor vehicles, turbojets, turbo propellers, telephone sets, structures and parts such as bridges, etc.
Following are some of the recommendations laid down by the CII:
Industrial Clusters
Enterprises can significantly benefit from the common activities and facilities that industrial clusters offer such as management expertise, effective marketing techniques, skilled labor, availability of financing tools, lower costs, etc.
Integrating with Global Value Chains
Participating and integrating into global value chains (GVC) is essential for high export growth as well as higher growth prospects for emerging economies.
Facilitating Special Economic Zones (SEZ) and Coastal Economic Zones (CEZ)
The revival and revamping of SEZ policy is a critical component for boosting Indian manufacturing exports.
Trade and Investment Agreements
Trade and investment agreements must be strengthened to develop strong value chains and sourcing of raw materials and intermediate inputs from partner countries for manufacturing.
Standards and Certifications
Mandatory standards for manufacturing with adequate testing and certification bodies and harmonizing Indian standards with global standards will contribute to enhancing export competitiveness.
Technology and innovation, boosting hi-tech exports, market promotion such as non-tariff barriers, tailored export strategies for top markets were also in the recommendation list of the CII. To incentivize greater marketing of products overseas, the CII has recommended doubling the income tax deduction. Also, the products with significant export potential are advised to be brought under the ambit of the Merchandise Exports from India Scheme (MEIS), which is aimed to offset infrastructural inefficiencies and the associated costs of exporting products produced in India.
Source: financialexpress.com