In its outlook for 2022-23, the Federation of Indian Exporters Organization (FIEO) expects India to overhaul its set target of $400 billion for FY22. This will be a first for the developing South Asian country. Despite being rocked by two waves of the pandemic in the last two fiscals, India’s sheer doggedness and tenacity have propped it on a very comfortable position in the new year. Read more on India’s export growth and its future.
India’s export growth
Exports in December 2021, rose by 37 percent to $37.29 billion – the highest ever in India’s history. As per data provided by the Ministry of Commerce, exports in April-December 2021 crossed $300 billion, inching ever so slightly towards the $400 billion mark. This recovery after a COVID-induced economic slowdown bodes well for the country and is likely to extend into the next financial year.
Two critical factors behind this amazing growth story can be found in the Centre’s actions. Production-linked incentives (PLI) and trade deals with key trading partners push India’s exports skywards. Domestic manufacturing received a huge boost from the various PLIs introduced by the government. A majority of India’s exports have shifted to software and digital services thanks to its talented pool of engineers and is expected to helm most of India’s growth story in the coming years.
Free Trade Agreements (FTAs) with key trade partners like the UAE, the UK, and Australia are also being pursued and is expected to open more avenues for growth. The Department of Commerce is also reportedly working on a new Foreign Trade Policy (FTP) and will help register record numbers in the future.
Global demand in trade goods is on the rise and will certainly buoy Indian exports. If one goes by the quarterly performance in 2021-22, there is the only one way to up. In the first three quarters of 2021, exports outpaced even pre-COVID levels and are expected to continue in Q4 and beyond.
That being said, one must take everything with a grain of salt. India’s impressive export story hides a rather unsettling story. While impressive on the surface, India’s growth remains uneven across sectors. Likewise, exports mirror this trend and can offset potential gains. Trade tensions and regionalism are also potential troublemakers that may play spoilsport.
India needs to be mindful of such obstacles in its journey to economic bliss. The new year will bring its own set of challenges and will test nation’s resolve. What remains to be see is if India stands up to the test.