India’s Commerce Minister, Piyush Goyal, recently announced that the country’s exports had reached a historic high of US$750 billion – a phenomenal 35 percent increase from US$500 billion recorded in financial year (FY) 2020–2021.
Although February 2023 saw a decline of 8.82 percent in exports and 8.21 percent in imports, the minister is optimistic, expressing his confidence that India could achieve US$2 trillion by 2030, with a trillion-dollar export target for both goods and services.
This will be impressive considering the doom and gloom trade scenario and challenging global economic conditions due to inflation, recession, and high interest rates.
The new Foreign Trade Policy (FTP) 2023 released on March 31 hopes to facilitate India’s export ambitions. For one, it does not set a short-term target and is designed to be dynamic and responsive to trade and industry feedback. The FTP 2023 will come in effect on April 1, 2023.
Focusing on sustainable and inclusive growth for a better future
The Commerce Minister emphasized that future growth must be measured not only in economic progress but also in social progress, human development indicators, and across all regions. He stressed the importance of sustainable and inclusive growth, highlighting environmental, social, and governance (ESG) factors.
Steady growth in the domestic market
India has witnessed steady growth in its domestic market over the last decade, leading to a rise in foreign direct investment (FDI) and prioritizing the establishment of the fundamental blocks necessary for long-term and viable economic development. Additionally, India has improved its rankings in the global innovation index and the ease of doing business index, indicating a positive outlook for further economic expansion. Moreover, India’s domestic market has been growing steadily, providing a solid foundation for further economic expansion.
Leading in renewable energy and potential for green ammonia production
India is making significant strides in the renewable energy sector, positioning itself to become a global leader in this field. With the potential to become a major player in green ammonia and hydrogen production, the country can significantly reduce the carbon impact of goods and services produced, attracting more foreign investment and trade.
Expectations for future growth
Despite India’s achievements, the country’s share of the international trade market is still relatively minuscule at US$32 trillion.
Goyal suggested that there are a wealth of possibilities given India’s new ideas and products as well as its handling of the COVID-19 pandemic – these are reflective of the new spirit in the country.
According to A. Sakthivel, the President of the Federation of Indian Export Organizations (FIEO), exports are expected to reach US$770-780 billion by the end of FY 2023, representing a high growth rate in the range of 15-16 percent. Sanjay Budhia, Chairman of the CII National Committee on EXIM, expressed confidence in the Indian government’s reforms to improve the trading environment and boost exports.
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