Model Answer
0 min readIntroduction
India’s exports are a crucial component of its economic growth, contributing significantly to GDP and employment. While historically reliant on services exports, the government has increasingly focused on boosting merchandise exports. In FY23, India’s merchandise exports stood at $451.03 billion (Directorate General of Commercial Intelligence & Statistics). Over the last decade, the Government of India has implemented a series of measures aimed at enhancing export competitiveness and diversifying export markets. This answer will examine these steps and assess whether they have yielded the desired results, considering both successes and shortcomings.
Policies and Initiatives to Boost Exports (2014-2024)
The government has adopted a multi-pronged approach to increase exports, encompassing trade facilitation, export promotion schemes, infrastructure development, and forging trade agreements.
1. Trade Facilitation Measures
- Directorate General of Foreign Trade (DGFT): Streamlining export procedures and reducing transaction costs through online platforms and simplified documentation.
- National Single Window System (NSWS): Launched in 2023, aims to provide a single point of contact for all trade-related clearances.
- Export Infrastructure Development: Investments in ports, airports, and logistics infrastructure to improve connectivity and reduce turnaround times. The Sagarmala project (launched in 2015) is a prime example.
2. Export Promotion Schemes
- Duty Entitlement Passbook Scheme (DEPB) & its replacement – Remission of Duties and Taxes on Exported Products (RoDTE): Providing duty refunds on inputs used in export production, enhancing cost competitiveness. RoDTE was implemented in 2021.
- Export Infrastructure Export Promotion Scheme (EEPC): Supporting export councils in promoting Indian products in international markets.
- Transport Infrastructure Efficiency and Freight Export Scheme (TIES): Providing financial assistance for upgrading transport infrastructure.
- Advance Authorization Scheme: Allowing duty-free import of inputs for export production.
3. Trade Agreements & Market Access
- Bilateral Trade Agreements (BTAs): Negotiating and signing BTAs with various countries to secure preferential market access for Indian goods. Examples include agreements with UAE and Australia (implemented in 2022).
- Comprehensive Economic Partnership Agreements (CEPAs): Pursuing CEPAs for deeper economic integration.
- Focus on new markets: Diversifying export destinations beyond traditional markets like the US and Europe, with increased focus on Africa, Latin America, and ASEAN.
4. Promoting Specific Sectors
- Textile Sector: Schemes like the Production Linked Incentive (PLI) scheme for textiles (approved in 2021) to boost domestic manufacturing and exports.
- Engineering Goods: Promoting engineering exports through dedicated export promotion councils and participation in international trade fairs.
- Agricultural Exports: Agricultural and Processed Food Products Export Development Authority (APEDA) promoting exports of agricultural products.
Assessment of Results
While the government’s efforts have yielded some positive results, the overall impact has been mixed.
| Indicator | 2014-15 | 2022-23 | Change (%) |
|---|---|---|---|
| Merchandise Exports (USD Billion) | 310.87 | 451.03 | +45.1% |
| Share of Manufacturing in Exports (%) | 68% | 62% | -6% |
| Global Trade Share (%) | 1.6% | 1.8% | +0.2% |
Positive Outcomes: Merchandise exports have increased significantly over the past decade. The PLI scheme has shown initial success in boosting production in certain sectors. Trade agreements with UAE and Australia are expected to further enhance export opportunities.
Challenges & Shortcomings: The share of manufacturing in exports has declined, indicating a continued reliance on primary and semi-processed goods. Global economic slowdown, geopolitical tensions (like the Russia-Ukraine war), and supply chain disruptions have negatively impacted export growth. India’s export basket remains concentrated, making it vulnerable to external shocks. Infrastructure bottlenecks continue to hinder export competitiveness. The RoDTE scheme, while helpful, has faced implementation challenges and concerns regarding coverage.
Conclusion
The Government of India has undertaken substantial efforts to increase exports over the last decade, with some demonstrable success in terms of overall export value. However, achieving sustainable and diversified export growth requires addressing underlying structural issues such as infrastructure deficits, skill gaps, and a concentrated export basket. Further streamlining trade procedures, enhancing infrastructure, and actively pursuing new trade agreements, alongside a focus on value-added manufacturing, are crucial for realizing India’s export potential and achieving its goal of becoming a major global trading nation.
Answer Length
This is a comprehensive model answer for learning purposes and may exceed the word limit. In the exam, always adhere to the prescribed word count.