Boost Export

    • During 2000-2011, exports grew at an annual rate of 21 % and 24 %, for goods and services, respectively.
    • Stagnation in exports of goods during and decline in services exports during 2012-19.
    • Decline as a percentage of GDP: From 25 % in 2012 to 19 % in 2019.
    • Low share in the world: India accounts for less than 2 % of the world exports of manufactures, while the share of China is 13 %.
Way forward:
    • Address rigidities in the factor markets (labour and land):
      • Remove the bias towards the capital and skill-intensive industries.
      • Participate in global value chains (GVCs) in labour-intensive industries and product lines; Emerge as a major hub for final assembly-related activities within GVCs.
    • Utilize unexploited potential: in traditional unskilled labour-intensive products such as textiles, clothing, footwear and toys.
    • Greater integration of domestic industries with GVCs:
      • Integration with Asia: By signing free trade agreements; revisit our position and negotiate with the Regional Comprehensive Economic Partnership (RCEP) countries to our advantage.
      • According to the last Economic Survey, by integrating “Assemble in India for the world” in “Make in India”, India can create 40 million well-paid jobs by 2025 and 80 million by 2030.
    • Enhance ease of doing business:  including honouring contracts, a flexible labour market, availability of land and other infrastructure.
    • Modify trade policy: Reverse the recent trend of protectionist policy by lowering import tariffs, which increased from the lowest-ever level of about 12 % in 2008 to 15 % in 2019.
In recent years, India’s exports are decreasing. In  your opinion, what needs to be done by the government to boost exports?  Discuss. (200 Words) 
Strong  growth in exports are needed to ensure that the targets of ‘Make In India’ and  accelerated job creation in the manufacturing sector can be met. In the past  few months, the exports have seen a contraction. A few steps can be taken to  boost exports –
    1. Ease of Business – The government has been focusing on improving the ease of business. This should help so that companies can be easily set up or expanded. This process must be strengthened.
    2. Tax Reform – The Goods and Services tax (GST) would help to create a single unified market in the country. It will remove a lot of distortions and streamline a company’s logistics. Hence, it must be brought forward at a reasonable rate of taxation with as few exemptions as possible.
    3. Focus on a few ‘Sunrise Industries’ – For fast returns, there must be increased focus on a few high growth industries like food Processing, footwear manufacturing etc.
    4. Labour Reforms – A key problem cited in the skewed business structure in India, which favors small-scale manufacturing which is inherently inefficient is the stringent labour regulations. Reform of these laws would help the businesses scale up.
    5. Incentives for exporters – Incentives in the form of excise duty subvention, soft loans etc. would be beneficial in promoting exports.
    6. Services related exports can be quickly scaled up and are more remunerative. Thus, the government should also focus on this segment for more value.
    7. Diversification of Export basket – The Indian Export basket is skewed in favor of commodities. The global crash in commodities prices has thus adversely affected Indian exports. The government must see this as an opportunity and attempt to diversify its export baskets.
    8. Reviewing the SEZ policy and tweaking it to ensure better utilization of the land and other incentives provided.
    9. Agricultural exports suffer from the poor quality of produce and lack of uniformity in size and shape of produce which are not accepted by many countries. Strict implementation of APEDA quality norms would give boost to agricultural exports which is India’s strength.
    10. Improving infrastructure like roads, rails and communication which would lift off current hindrances in the transport of goods.
    11. Land: Ensure proper, adequate and timely land acquisition without negating interests of common people
    12. Government (or the RBI ) can allow the rupee to depreciate(as is happening now),to boost export competitiveness.
    13. Diplomatic steps to open up goods and services in which we are leaders from the negative lists of our trade partners, such as pharmaceutical, services and automobile manufacturing.
    14. Engagement in new destinations such as Latin America, Africa and other island nations.
    15. Single window clearance and easy access to financial mechanisms for activities related with exports.
    16. Setting up of more SEZ, NIMZ, industrial parks
    17. More focus on MSME (~40-45% of our exports) and traditional sectors (handicrafts, artisans, handlooms) where we can access an edge over others.
    18. Tariff and Non-Tariff barriers: High import duties. CVD should be dealt with
    19. Empowering the export promotion council and community boards like Silk board for better production and marketing of those products. Agricultural Export zones in the country which are around 60 can be given tax exemptions and subsidy for export purposes.
    20. India should quickly solve the dispute on coal, iron ore and other mining issues because if dispute will solve then again mining will boost and so export.
Some other concerns:
    • Innovation to rise up in value chain
    • RCEP and TPP
    • IPR issues
    • slowdown in the global economy,
    • declining crude oil prices coupled with low commodity prices have added to the woes of the exports sector.
    • Chinese slowdown and devaluation of Yuan has come as yet another jolt for the sector.
    • domestic challenges like
      • slowdown in manufacturing,
      • high logistics cost,
      • increasing transaction cost and
      • product profile of our exports have also contributed in no less measure.

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