The report, however, adds that India’s exports have been showing remarkable performance, logging record-high levels since FY22, The review noted how merchandise exports have risen by more than 50 per cent and services exports by 120 per cent over the past decade (FY13 to FY23). “The highest-ever merchandise export of $451.1 billion was achieved in FY23,” it said.
The review highlighted that despite global shocks, India’s merchandise trade balance improved markedly from a deficit of $189.2 billion in April-November 2022 to $166.4 billion in April-November 2023 as a result of the decline in imports.
Observing that though the export mix, in terms of the principal commodity has not changed much over the years, there has been a progressive diversification in India’s export basket, the review said. It added that that there is scope for more quality and complexity to exports given the existing capabilities.
On the aspect of services exports, it said how India has carved a niche for itself as a knowledge-based economy which is evident from the fact that software services exports comprise almost half of the service exports consistently. It highlighted how a gradual increase in the share of business services in total services exports has been noticed since FY20. “In terms of growth of exports, both business services and financial services have experienced double-digit growth in the aftermath of the pandemic year, i.e., since FY22 which are in line with more than 20 per cent increase in software and overall services export,” it noted. This, it said, reflected in the increased presence of Global Capability Centres in India during and following the pandemic years. Delving on how the Department of Telecommunications issued guidelines for Other Service Providers (OSPs), which promoted the Work-From-Home culture in India and extended it to allow Work From Anywhere in India, the review elaborated further on what these included. “The guidelines included provision for the sharing of infrastructure, use of the distributed architecture of Electronic Private Automatic Branch Exchange (EPABX) and interconnection. The guidelines made it easier for BPOs and ITeS firms to cut down on the cost of location, rent for premises and other ancillary costs such as electricity and internet bills,” it said.
Collectively, the review said, such aspects showed up in the overall pick-up in total exports (merchandise plus services) when it reached $683.7 billion in FY 22 followed by $781.4 billion in FY23. “A comparison of the national account estimates for the previous two decades since FY04 indicates that, on average, the share of net exports to GDP improved from (-)4.1 to (-)2.6 during FY04-FY13 to FY14-FY24,” it said.
Noting how continuous efforts in deliberate policy and trade facilitation measures are being undertaken to enhance production capacity and export promotion for boosting India’s presence in the global market, the review mentioned that the aim is a $2 trillion exports target by 2030. “Setting export targets and monitoring of these targets followed by course correction, provision of export credit insurance services for short-term as well as medium and long-term exports, encouraging banks to provide affordable and adequate export credit to MSME exporters, enabling them to explore new markets and diversify existing products competitively are some of the measures being taken towards this end,” it said.
