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India_Export_strategy

India: Export strategy

Export strategy India, following Gandhian principles, has aimed to be self-reliant. Making India self reliant would require providing jobs to the people, more revenue generation among common people. Many other measures must be taken care of and priority must be given to increasing exports.

India_Export_strategy

India has tremendous potential to be an ‘export major’ in the world. In 2019 India’s export share in the world was 1.71 % in  merchandise. But, India needs a revamped export strategy currently India has low level participation in world value chains.

Export strategy must be planned by laying out a roadmap- analysing what is in demand and what yields high returns. India has been called the ‘pharmacy of the world’- to retain this tag India must reduce its imports of Active Pharmaceutical ingredients (APIs) which it imports mostly from China.

 

 

Scalability and Economies of scale

Secondly, India must aim for high scalability and economies of scale in this respect. Additionally, India needs to heavily invest in research and development- by the means of greater grants and tax deductions in R&D. Even so, when 300/ 500 fortune 500 companies have their base in India, India still invests very less in R&D.

India must focus on what it is best at, in terms of export and what it must aim to be in terms of world demand and higher returns. In the case of former, India has greatest potential in unskilled labour-intensive Industries like- textiles, footwear, toys, etc. Recently, PM Narendra Modi has also given a call for increasing toy manufacturing in the country.

Therefore, it must increase it by the means of more flow of credit, easy set-ups, etc. Secondly, India must aim to diversify its exports in high yielding sectors like electronics, high technology (by the means of improved R&D), petroleum goods, automobile, machinery, plastic goods, etc.  India’s share is less than 33% in its exports and less than 1% in world Exports.

Moreover, agri exports must be targeted- benefiting from China’s maligned image in today’s scene.

Diversified Export Items

India_Export_strategyFruits, vegetables, marine items like shrills on export basis must be focused on. There is also a need to develop regional value chains and also targeting countries which are major importers and engaging with them by the means of trade agreements.

India must take advantage of the US China trade war, like Vietnam has done by attracting companies relocating bases by giving benefits like relaxed regulations, plug and play environment, and easy land availability.

Utilise India’s Abundant Cheap Labour

 Therefore, India must make use of its abundant cheap labour to boost manufacturing to increase contribution to GDP which is only at 16% now. it will also create jobs, help shift from primary activities, reduce forex outflow (which can be used elsewhere) and boost self-reliance.

India has tremendous potential to be an ‘export major’ in the world. In 2019 India’s export share in the world was 1.71 % in  merchandise. But, India needs a revamped export strategy currently India has low level participation in world value chains.

Export strategy must be planned by laying out a roadmap- analysing what is in demand and what yields high returns. India has been called the ‘pharmacy of the world’- to retain this tag India must reduce its imports of Active Pharmaceutical ingredients (APIs) which it imports mostly from China.

The dominance of capital intensive products in India’s exports along with a low level of participation in global value chains have resulted in a disproportionate shift in India’s geographical direction of exports from traditional rich country markets to other destinations.

 

AUTHOR:- SURAMYA SHARMA 

CATEGORY :- Indian Economy/ Current Affairs

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