India Set For A Trade Boom
Trade has been pivotal to every country's growth since time immemorial. This holds true in the 21st century. Trade determines many parameters of an economy, be it in manufacturing, or employment, and even the strength of the currency. Indian government understands this and has hence come up with a committee under the Ministry of Commerce to reliase India's trade ambitions.
What are the latest proposals?
The government of India wants India's export to touch 2 trillion USD by 2030. To achieve this goal, we need better administration. In order to achieve this, the trade promotion body proposed by the ministry of commerce has been set up to enhance India's export. The work of this council will be to promote and plan a trade-related restructuring body. The focus is in improving India's branding and focus markets. These include the textile, IT, leather sector, etc as the target market.
Boston Consulting Group had earlier submitted a 14-volume report, asking the Ministry of Commerce to restructure itself. This development has resulted in the formation of the ‘Trade Promotion Body'. This body will include key private sector players who will have freedom of operation. They will set targets for trade and will monitor it every six months, including at state as well as sectoral levels. The trade promotion body will include 13 elements including ‘brand India', government-to-government liaising, industry liaising, and exporter training. We have bilateral and multilateral trade negotiations with many countries, the body will look into restructuring the same. The body will have a single data source for exporters and buyers. It will be a marketplace for exporters and buyers. These will be the primary responsibilities of the council, which will be working under the Ministry of Commerce.
Why do we need the changes?
As per World Trade Statistical Review, 2021, India accounts for 1.6 percent of global exports and 2.1 percent of imports. Apart from the already documented data, India is at a stage where repo rates are rising, inflation is skyrocketing, gas prices are going up, and oil rates are fluctuating. We are also living among global political tensions, and fear of recession. The demands and exports are suffering greatly today. In fact, United Nations Convention on Trade and Development (UNCTAD) has predicted that India will grow at a rate of 5.7 percent this fiscal year, which will further drop down to 4.3 percent in the year after that due to these factors. In spite of these bottlenecks, India wants to scale up production and export in pharma, gems and jewelry, marine and farmers' products, textiles and leather, engineering goods, electronics and telecommunication products, and chemicals.
In such a climate, it is important to approach in a planned way. The Commerce Ministry is taking prudent decisions around the same to make India future ready. They are planning to take India's exports from $650 billion to $2 trillion by FY31. If the government wants 100 of India's brands as global champions by 2047, then we need these reforms. Instead of having multiple export promotion councils we need to create a single body that functions as an umbrella and brings everyone to the same table. Whether the trade promotion council will be successful or not depends on how the trade promotion body will be structured and their suggestions implemented
