India’s goods and services exports in FY24 were at an all-time high of $778.2 billion, up 0.23% from $776.4 billion in 2022-23 (goods USD 437.1 billion and services USD 341 billion).
Key issues in India’s export saga;
Geopolitical uncertainties
The ongoing Russia-Ukraine war coupled with various major geo-political tensions, including the Red Sea crisis and the Israel-Hamas conflict, has also made the international trade scenario much tougher for the Indian exporters.
India’s top five export destinations are the US, the Netherlands, UAE, Malaysia, and the UK – recorded healthy growth in May.
According to the commerce ministry data released in June, the estimated value of services exported in May is USD 30.16 billion as compared to USD 26.99 billion in May 2023.
Imports of services are estimated to have increased to USD 17.28 billion during the month as compared to USD 15.88 billion in May 2023.
Manufacturing push
Boosting manufacturing is crucial for labor-intensive sectors as it can generate substantial employment opportunities, drive economic growth, and reduce poverty. By investing in manufacturing, India can enhance productivity, create a skilled workforce, and stimulate innovation.
Activity in India’s manufacturing sector rebounded last month as output increased on robust demand, leading to the fastest rate of hiring in over 19 years, despite inflationary pressures remaining elevated, HSBC final India Manufacturing Purchasing Managers’ Index showed.Strong demand is a much needed ingredient for growth in Asia’s third-largest economy, which is the fastest growing among major economies, but much of the expansion is attributed to the government’s infrastructure spending.
Complicated FTAs
In the India-UK FTA, the issues that need to be ironed out include duties in sectors like electric vehicles, alcoholic beverages, and services. India and the UK launched talks for an FTA in January 2022 to boost economic ties between the two nations. There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights.
The bilateral trade between India and the UK increased to USD 21.34 billion in 2023-24 from 20.36 billion in 2022-23. India and the UK launched talks for an FTA in January 2022 to boost economic ties between the two nations.
There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights. The bilateral trade between India and the UK increased to USD 21.34 billion in 2023-24 from 20.36 billion in 2022-23.
Reports also suggested that the GCC group of countries are interested in an FTA with India. GCC is a union of six countries – Saudi Arabia, UAE, Qatar, Kuwait, Oman and Bahrain.
What should the Budget do?
- Boost to e-commerce exports
- PLI push for toys, leather goods
- Rationalise import duty on raw materials like cotton
- Higher allocation for export marketing, incentive schemes
The $800 billion target for this fiscal
India’s goods and services exports are expected to cross USD 800 billion this fiscal despite global challenges, Commerce and Industry Minister Piyush Goyal said.
He said that the global situation is serious as war is still ongoing between Ukraine-Russia and Israel-Hamas, and the Red sea crisis.
The minister added that there are also elections in some of the major democracies like in Europe.
“In such a situation it’s a positive sign that our exports are growing (9 per cent growth in May) and …this also reflects that the world wants to do trade and investments with India. We are confident that this year we will have over USD 800 billion exports and it will be a historic record,” Goyal said.
A look at key companies and their stock prices
Content Source: economictimes.indiatimes.com