Measures are needed to sustain the high exports achieved in the first six months of the current year

In the first six months of the current calendar year, India's exports grew at an annual rate of 7.10 per cent due to lower export figures. If India's exports are to truly increase, they must be made globally competitive. Demand from India's export hubs is also on the rise as the impact of corona is now waning and vaccination operations are accelerating. Exports in July grew by 3% year-on-year to a record 2.18 billion. The first quarter of 2021 saw a 10 per cent increase in global trade in goods and services, and even higher than the level of 2016. Global trade is expected to grow by 3% in 2021, after declining by 6.50% in 2020. Demand from Europe and North America is expected to remain strong as a result of strong fiscal stimulus. The World Trade Organization also expects demand to be met from Asia.

Given the growth in global trade since the Corona era, India has a golden opportunity to improve its economy through exports, if it is caught in time. Prosperous countries like Europe, China, UK, USA and Hong Kong are India's trading partners. Approximately 3% of India's total exports go to these countries. Exports to these countries increased in the March quarter. With increasing demand, India has the opportunity to increase its exports, but it remains important to provide competitive prices. The reason behind the increase in India's exports is the increase in petroleum exports. However, exports to India's labor-intensive sectors such as readymade garments, leather products, agriculture and allied products are declining. Exports of these products declined during the second wave of Corona in April and May. The slowdown in labor-intensive exports could tarnish the employment picture in the country.

In 2020, India's share of global trade has declined to 1.50 per cent compared to 2015. In 2016, the share was 1.50 per cent. With the rupee weakening against the dollar and global demand rising, there is room for growth in India's exports in the near future, or let's say in the last six months of 2021. The Government of India has supported Project Exports by increasing the insurance cover, but there are many other aspects that need to be addressed. These weaknesses include high tariff and non-tariff costs, structural defects, shortage of containers and complex labor laws. A report by the World Bank sheds light on how the price of goods distributed domestically in emerging countries rises in the world market and decreases in terms of price competitiveness of those goods. Competitiveness in terms of price of goods can be enhanced by reducing the cost of duty at shipping and shipping and logistics costs. It remains our responsibility to meet the demands of these countries when the Corona epidemic has forced the world to look away from China and towards India.

Given the fact that small, micro and small and medium enterprises (MSMEs) contribute fifty per cent to the export of goods from the country, it is also necessary for the government to assess the readiness of the MSME sector to increase the overall exports from the country. The position of MSMEs must be assessed as India prepares its new foreign trade policy. With the target of making India a five trillion economy, the government is formulating a foreign trade policy for the period 2021 to 205.

While MSMEs are rarely mentioned in the 13-page document of the current policy for 2018-20, it is important to pay more attention to this sector in the new policy, keeping in view the important contribution of MSMEs in the country's exports of goods. Issues like lack of knowledge about government schemes, ignorance of international standards of import-export, inadequate understanding of export process, low export credit are hindering MSMEs on the export front. It is not that policies for MSMEs are not formulated in the country's foreign trade policy, but they are not enforced as vigorously as these policies are announced. The main reason behind the unsatisfactory implementation is the limited number of government employees for the country's 20 million MSMEs, which can take adequate care of the sector.

India's presence abroad is not as strong as it should be for Indian trade associations or government agencies to gain markets abroad or increase trade. The new foreign trade policy ensures that the country's trade associations consult with their counterparts abroad, but their scope is very limited.