By Aashish Chandorkar
The $ 30 billion mark per month has historically been a “psychological barrier” to Indian exports. When in March 2021, commodity exports crossed the mark of ease, the lazy analysis in the opinion pieces was a restructuring of normal perception — commodity prices have risen, shipping costs have risen, it’s just a blip and so on. Analysis – and failure to identify an emerging trend – could not be more wrong. From March 2021 to February 2022, more than 30 30 billion worth of goods were exported per month. The trend is likely to continue for March 2022. For the first time in Indian trade history, annual merchandise exports have reached $ 400 billion and the final figure for the year could be closer to $ 410 billion. If service export data is added, total exports will end up near the $ 650 billion mark. This will keep India close to the world’s top ten exporters, if not in the top ten. With a strong 13-month export of goods and services, it is fair to call this huge positive change a trend, not a blip.
There are three notable aspects that characterize India’s emerging trade competition and global integration. First, the $ 400 billion product exports and the $ 650 billion total exports are the result of a well-planned and self-reliant India. Prime Minister Narendra Modi spoke of the need to revive the industrial economy, where India exploits its vast market and human capital talent base. Since then, the industry and various government agencies have come together with renewed vigor to develop capacity for great value-added in India. In this regard, the Center has assessed trade potential with different countries by analyzing past trends. About 200 countries or territories were closely analyzed to understand how the Indian powers matched the market demand for each entity. Indian missions, regional divisions of the ministry, industry bodies and export development agencies come together to ensure that every possible opportunity is pursued. Prime Minister Modi led it in August 2021 by talking to all Indian missions and emphasizing the potential of Indian industry in the export market.
Second, a large portion of the 400 400 billion product exports involved domestic value addition. One of the historical jokes about Indian exports is that we ship large quantities of raw materials or low value added products. However, in FY 22, the top product categories paint a different and very optimistic picture. As of March 21, the day India reached the 400 billion export mark, the top segment of exports was engineering products, about $ 108 billion. After processed petroleum products $ 59.6 billion, gems and jewelry $ 37.7 billion, organic and inorganic chemicals $ 28.2 billion, and pharmaceuticals and pharmaceuticals $ 23.7 billion. This export basket clearly indicates that the rise is driven by actual production capacity. There is always room for improvement and growth in India-based value addition. But the numbers clearly speak for themselves — it’s a production-driven export revival. For reference, exports of pure raw materials, such as mica, coal and other ores and minerals, were $ 5 billion, only thirteen as a division. Iron ore exports amounted to $ 3.1 billion, the 18th most valuable category. It is a testament to the success of a broader industrial policy driven by increased domestic capacity and efficiency. Indian consumers are getting access to better products and the world is leaning towards India to meet the demand for its products.
Third, several groundbreaking sections stand out for the first time. India’s electronics exports were 15 billion, already the seventh largest export segment. Of this, $ 5.5 billion would be mobile phone exports alone, a category where only five years ago India had a very low manufacturing presence. The same is true of defense equipment. India will earn about $ 1.5 billion in export earnings this year, almost six times more than in the last eight years. This trend is best seen in agricultural items. Banganapalli and Subarnarekha in Andhra Pradesh are going to South Korea from Mango; Sapota from Palghar, Jamun from Uttar Pradesh, litchi from Bihar are going to UK; And bananas from Jalgaon, dragon fruit from Sangli, Burmese grapes from Assam and flowers from Madurai have reached the UAE, breaking new ground. This is important because the business benefits of such products are credited to market participants with a relatively small economic size. These groundbreaking sections may appear individually small, but at the margins, they can make a huge positive difference to the participants involved. India recently signed a comprehensive economic partnership agreement with the United Arab Emirates. Trade agreements with the United Kingdom, Australia and Canada in various formats are also being discussed. This is significant because all these countries have significant bilateral trade potential, with the UAE and the UK being part of India’s top ten export destinations.
With the Prime Minister’s Speed Power Plan to reduce logistical costs and friction and create signed infrastructural resources, products and services from currently non-essential Indian destinations will also likely find new markets. A great new era of growth in world trade leadership is unfolding before us পরিবেশ an environment where India is now a strong and confident player.
Writer Counselor, Permanent Mission of India to the WTO.
