Under the leadership of Prime Minister Narendra Modi, India is fast emerging as the manufacturing and export hub of our continent.
India is already leading in the services sector, and with the way our government has promoted trade and commerce, I am confident that day is not far when India will outpace our regional rivals in manufacturing and exports too.
To arrive at this point today, the central government has introduced multiple policy initiatives, and export friendly schemes that is enabling increase in exports from India. I am discussing some of them.
Foreign Trade Policy
The government envisioned boosting exports by introducing India's Foreign Trade Policy in 2015.
This policy envisions assisting exporters in maximising the benefits of GST, boosting cross-border trading ease, raising revenue from agriculture-based exports, closely monitoring export performance, and promoting exports from MSMEs and labour-intensive industries.
Though the policy was expected to end in 2020, however given the prevailing volatile global economic and geopolitical situation the policy has been further extended to March 2023.
In order to provide financial impetus to those exporting, our government has implemented the Remission of Duties and Taxes on Exported Products (RODTEP) scheme and rebate of State and Central Levies and Taxes (RosCTL) Scheme with effect from January 2021.
Further the scope of scheme (RODTEP) will be extended to new products Chemicals, Pharmaceuticals and Iron and Steel Sectors till 30 September 2023 with effect from 15 December 2022.
The outlay for this scheme will increase by around Rs 1000/crore from Rs12454/crore, and number of items to be covered will go up to 10,342 from 8,731.
Districts as Export Hubs
To achieve the goal of ‘AatmaNirbhar Bharat’, ‘Vocal for Local’ and ‘Make in India’ initiatives, each district will be promoted as hub for exports. 725 districts have been identified across the country. This is the first such initiative which tries to target export promotion, manufacturing and employment generation at grass root level.
This scheme has been launched by the government to identifying products and export potential in each district. Products to be exported are agro based, textiles, chemicals, carpets and gold jewellery, toys, handicrafts and handlooms. This will help ensure grassroots level growth in export economy.
This scheme carries immense potential of developing each district through export led growth.
Production Linked Incentives (PLI)
To turn India into a global hub of design and manufacturing, our government has introduced Production Linked Incentives (PLI) scheme in 14 key sectors with an outlay of nearly two lakh crore rupees.
These sectors include automobiles, auto components, drone and drone components, telecom and networking, electronics, IT hardware, white goods, pharma, textiles, food products, high efficiency solar PV modules, advance chemistry cell and specialty steel. This has attracted massive investments into these key sectors from around the globe.
In terms of production, the outcome from the PLI scheme can be over $504 billion and is expected to add around one crore jobs in the next five years. It has the potential to add nearly 4 per cent to GDP per annum in terms of incremental revenue if fully realised.
As of June 2022, the scheme has led to total production of more than Rs 167,770 crore including exports of Rs 65,240 crore. PLI scheme for large scale electronics has emerged as the most successful scheme.
Agricultural Export Policy
A comprehensive Agricultural Export Policy was launched in December 2018 to provide an impetus to agriculture exports and enhance farmers’ income.
This policy has been framed with a focus on agriculture export oriented production, export promotion, better farmer realisation and synchronisation within policies and programmes of Government of India.
During 2021-22, India exported 110 LMT sugar and became second largest exporter of sugar in the world and earned about Rs 40,000 crore worth of foreign exchange for the country.
In the same time, India exported millets products worth of $34.32 million. India’s agricultural and processed food products exports rose to $1.3 billion in April-September from $1.1 billion over the same period of last fiscal year.
The export of rice increased from $2.4 billion in April-June 2021 to $2.7 billion in April-June 2022 showing a growth of 13 per cent. The export of meat, dairy and poultry products increased by 10.29 per cent and the export of other cereals recorded a growth of 12.29 per cent in six months of the current fiscal.
It is because of this, India has seen rapid growth in agri-exports. Especially a long neglected region like the North East, has seen more than 85 per cent growth in the export of agricultural products over the last six years.
Export has reached to $17.2 million in 2021-22 from $2.52 million in 2016-17. The major destinations of export have been Bangladesh, Bhutan, the Middle East, the UK, and Europe.
Growth and Beyond
Thanks to these policies India’s overall exports in April-September 2022 grew by an estimated 21.03 per cent to $382.31 billion, over the same period last year.
The share of exports of goods and services in GDP has increased from 18.8 per cent in 2017-18 to 21.4 per cent in 2021-22, i.e. from Rs 32,11,521 crore to Rs 50,63,885 crore.
Government’s push for “Make in India’, “Aatmanirbhar Bharat”, “StandUp India”, “StartUp India”, “Vocal for Local” and numerous other schemes and export friendly policies launched in the past eight years is starting to show its results, despite the massive global slowdown and recession.
India has emerged as ‘the bright spot’ on an otherwise dark horizon.
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