For a 5 trillion Dollar Economy, Exports Should Rise to 20% of GDP

 

5 trillion Dollar Economy: Relevance

• GS 3: Indian Economy and issues relating to planning, mobilization, of resources, growth, development and employment.

 

India 5 trillion economy: Context

• Recently, the Minister of Commerce and Industry has said that to achieve the objective of 5 trillion-dollar economy, exports share should rise to ideally 25%, but at the very least 20%.
• He also said that a strong Rupee will be good for exports.

 

 

Exports should rise to 20%: Key points

• Why 25%: We need to support our import of Oil. Therefore, our exports will have to increase significantly so that we can continue to finance our imports and strengthen the rupee in the days to come.
• How strong rupee support exports: A strong currency reflects the strength of a nation and will always be good for exports, because India is a net importer of goods. A strong currency supports the Indian economy.
  • Notably, it is believed that weaker currency supports exports. See here for explanation.
• The Minister said that he is hopeful India’s exports will touch $410 Billion in the current financial year.
  • Until Feb 2022, Indian exports touched $374 Bn.

Exports should rise to 20%: Steps needed

• Reorienting of economic laws to suit the changing needs of time.
• Leverage our ‘EDGE’ to give us an edge in the global competition.
  • Economies of Scale
  • Demographic Dividend
  • Good Governance, &
  • Encourage Innovation in Industry
• 3-point Call to Action for the private industry
  • Explore various FTA provisions and use them to itsfull potential; take active part in existing negotiations, – FTAs are 2-way traffic; we have to be demanders &also accommodate their demands
  • Through actions, instil a feeling of pride in ourcitizens, that our products are at par or even betterthan global products. Make the difference visible!Gone are the days when imported meant better, “Made in India” mark should compete with globalbrands in every category
  • Focus on development of Aspirational districts & Tier2 & 3 cities. These can be the future export hubs.

 

 

5 trillion Dollar Economy: Way forward

• The Industry, Government& Citizens, need to work together (sabka prayaas) to reinforce India’s position as a world leader by increasing India’s share in global trade, raising share of manufacturing in our GDP and aim to reach among the top 3 nations in global services trade.

 

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