By: ASHOK SAJJANHAR, Former Ambassador
In a first-of-its-kind initiative, Prime Minister Narendra Modi interacted virtually with Heads of Indian Missions abroad on 6th August, 2021. Ministers of External Affairs and Commerce & Industry were also present. Secretaries of more than twenty departments, state government officials, members of Export Promotion Councils, and Chambers of Commerce also attended the virtual meeting.
The primary objective of the interaction, in addition to celebrating the 75th anniversary of India’s independence, was to build a clear vision and roadmap for future India and to give a significant impetus to exports.
India’s exports have not performed well in recent years. They have languished around US$ 320 billion since 2014. This is around 10% of India’s total GDP. It is commendable that exports during April-July, 2021 grew 73.86% year-on-year to US$ 130.56 billion, as against US$ 75.10 billion in the same period last year. This signals that the rapid economic recovery in key Western markets is increasing the demand for Indian products. The growth is also attributed to the ‘’Atmanirbhar Bharat’’ and ‘’Make in India’’ initiatives launched by the government. The government has set a merchandise exports target of US$ 400 billion for FY22.
No country, big or small, has been able to register high rates of growth without a substantial increase in its exports. In India’s plans to increase the size of its economy from the current US$ 3 trillion to US$ 5 trillion by 2026 or so, the contribution of exports is US$ 1 trillion which represents 20% of its economy. It will require an enormous effort to increase India’s exports from the current US$ 340 billion to US$ 1 trillion in the coming 5 years.
The government is rooting for “Vocal for Local” for India to beat the pandemic-induced slump in the economy. This initiative was designed to move away from China-dominated supply chains amid the pandemic.
Prime Minister focused on the necessity and potential, including the size of its economy, its manufacturing and service industry base, of expanding India’s exports. Mr. Modi said that the world is shrinking due to physical, technological and financial connectivity. New opportunities are hence being created for expansion of our exports. He added that the Production Linked Incentive Scheme, recently launched by the government in 13 sectors, will not only help in increasing the scale of our manufacturing but also enhance its global quality and efficiency.
Prime Minister noted that to achieve this, it is essential to gain access to the global supply chains which can be done by moving towards the best technology, focussing on innovation, and increasing share in R&D. It was necessary to encourage competition and excellence and prepare global champions in every sector.
Mr. Modi showcased the decision taken by India to get rid of retrospective taxation as an example of India’s commitment to promote foreign investment and be consistent in its policies.
Prime Minister Modi said that to boost exports, manufacturing had to be scaled up with special emphasis on quality of products, transport logistics’ bottlenecks cleared at all levels, the government – both at the central and state levels — need to work closely with Indian businesses, and Indian missions need to identify more destinations for Indian products.
Only when these four factors came together would India’s local products go global and India achieve the goal of ‘Make in India for the world.’
Prime Minister complimented the business and industry community in rising up to the challenge during the time of the pandemic to effectively handle the medical emergency and also contribute to reviving growth.
Mr. Modi listed the incentives offered by the government to encourage Indian businesses including the ₹3 lakh crore emergency credit guarantee scheme for small and medium scale industries and others affected by covid-19 related shutdowns. To encourage recovery and growth, an extra ₹1,50,000 crore had been allocated.
Prime Minister encouraged the Indian Embassies, business enterprises, and export promotion agencies to find new destinations and promote new products. He assured all participants that the Centre and state governments were working in unison to achieve these objectives.
The Address by Prime Minister Modi will go a long way to focus on the importance of exports in national rejuvenation and the significant role that Indian Missions abroad and various commercial and economic organizations can play in achieving India’s ambitious targets in the economic field.