India’s Exports Showcase Remarkable Resilience Post-COVID Years
India’s export sector has demonstrated a remarkable uptick in resilience during the post-COVID era, with growth rates reaching 20% and 9.7% in 2021 and 2022, respectively, marking the highest among the top 20 leading exporters. This insight is derived from a research report by the PHD Research Bureau, PHD Chamber of Commerce and Industry, titled “India’s Emerging Export Dynamics: Vision USD 2 Trillion Exports by 2030.”
Mr. Sanjeev Agrawal, President of PHD Chamber of Commerce and Industry, attributes this success to a dynamic policy environment provided by the government and the concerted efforts of exporters to integrate into global value chains. Despite a temporary slowdown, October 2023 witnessed a revival, with a 9% increase in exports of goods and services.
Over the past decade, exports have surged significantly, escalating from USD 375 billion in FY 2011 to USD 770 billion in FY 2023. The recent launch of India’s new Foreign Trade Policy (FTP) 2023, emphasizing Duration, Dynamism, Decentralisation, Direction, and Disaster-proofing, aims to create an enabling ecosystem for exporters. Dr. Ranjeet Mehta, Executive Director, PHD Chamber of Commerce and Industry, notes that this policy seeks to enhance India’s competitiveness globally and aligns with the vision of “Atmanirbhar” (self-reliance).
Identifying emerging high-growth destinations such as Togo, Netherlands, Brazil, Israel, Indonesia, Turkey, Australia, South Africa, Saudi Arabia, and Belgium, along with high-growth export commodities like Sugar, confectionery, Mineral fuel and oils, aluminum and articles, inorganic chemicals, ships, boats, and floating structures, rubber and articles, and optical, photographic, medical apparatus, the report anticipates a boost in India’s export growth.
The top 10 highly growing export destinations, averaged from FY 2019 to FY 2023, include Togo (73%), the Netherlands (36%), Brazil (28%), Israel (27%), Indonesia (24%), Turkey (22%), Australia (20%), South Africa (19%), Saudi Arabia (16%), and Belgium (13%). These countries are emerging as major growth destinations for India’s exports, though volumes need to increase significantly in the coming times.
Similarly, the top 10 highly growing export commodities, averaged from FY 2019 to FY 2023, encompass Sugar and confectionery (43%), Mineral fuel and oils (36%), Electrical machinery and parts (27%), aluminum and articles (18%), inorganic chemicals, precious and rare-earth metals (16%), miscellaneous chemical products (16%), Cereals (14%), iron and steel (12%), ships, boats, and floating structures (11%), rubber and articles (11%), and optical, photographic, medical apparatus (10%).
These high-growth, high-volume export commodities harbor significant potential to enhance India’s export growth, as highlighted by Mr. Agrawal. The identification of 75 products, constituting about 50% of India’s total exports in FY 2023, suggests untapped potential. These 75 products, accounting for USD 222 billion in the world exports of USD 3838 billion, have grown at 11% in 2022-23, outpacing the 6% growth of India’s total merchandise exports.
Dr. SP Sharma, Chief Economist of PHD Chamber of Commerce and Industry, underscores the commendable growth of services at 24% over the last two years, showcasing resilience and price competitiveness in global markets. Dr. Sharma notes that the growth of services exports will be a major driver in achieving the ambitious targets of USD 2 trillion exports by 2030.
Looking ahead, Mr. Agrawal emphasizes the crucial role of calibrated reforms by the government to achieve the USD 2 trillion target by 2030. He calls for a focus on reducing the cost of business and enhancing the ease of doing business to boost the competitiveness of domestic manufacturing. Exploring new Free Trade Agreements (FTAs) with the EU and the UK could significantly increase India’s global participation in the global value chains, concludes Mr. Agrawal.
