In such cases, product basket and destination diversification, which India is taking through FTAs, would be useful to enhance trade opportunities. The Survey adds that at times when the base (global growth and global trade) is not growing, export growth will have to come predominantly through market share gains. “In turn, that comes from the focus on efficiency, productivity, technology, and innovation. That game has to be lifted. Governments can try and open markets through FTAs. But, to take advantage of that is in the hands of private sector participants,” says the Survey.
Exports will also come under pressure as competition from South Asian countries in a few of its export competitive products heats up. The Survey cites examples of the textile sector, where Bangladesh and Vietnam are seen to be expanding their exports globally, in recent years. Further, Vietnam has been able to expand its exports in machinery and equipment; computers, electronic products, certain agriculture products, etc. “However, given the benefits of the lower average age of the working population along with the advantage of economies of scale, India has the potential to cater to the global demand for several products in a cost-effective manner,” says the Economic Survey 2022-23.
India, however, has an innate buffer in its external sector. “India’s export of services, primarily contributed by software, business, and travel services, while remaining robust during the year so far, embodies a greater degree of resilience,” the Survey adds.
