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CII outlines 10 areas of action to boost India's exports

14
Aug '20
Pic: PR Newswire
Pic: PR Newswire
India must aim to achieve 5 per cent share in world merchandise exports and 7 per cent in services exports by 2025, according to report titled ‘Re-orienting India’s Export Endeavour in the Covid-19 World’ released recently by the Confederation of Indian Industry (CII), which has outlined ten areas where action is required to boost exports.

“The pandemic situation has impacted world trade negatively. However, it also provides a big opportunity for India to better engage with the world and boost its export performance. This is an opportune time for India to strengthen its domestic manufacturing through a strong partnership between the Government and Industry”, said CII director general Chandrajit Banerjee.

“A key point in India’s export strategy must be to strengthen its participation in global value chains (GVC),” he added.

One, an open and facilitative import environment is required to attract global companies and ensure competitive access to intermediate goods. In general, higher duties on finished goods and lower duties on intermediates should be applied.

Two, the foreign trade policy should be brought out at the earliest to establish a stable and predictable export policy regime.

Three, export finance must be expanded. The Interest Equalisation Scheme should be extended for another two years for all exporters, including the sector not representing micro, small and medium enterprises (MSMEs), according to the CII report, which called for fast-tracking goods and services tax (GST) refunds that hold up working capital. Cesses should also be removed, it said.

The capacities of the Export Import Bank and the Export Credit Guarantee Corporation need to be strengthened to raise resources and lower risks.

Four, trade facilitation can be strengthened through digital tools for faster movement of goods at the border. It recommended reducing physical examination of goods, widening the Authorised Economy Operator programme, and ensuring Direct Port Delivery system.

Five, the Trade Infrastructure for Export Scheme (TIES) must be extended and included under the National Infrastructure Pipeline. In the medium term, it is essential to draw up a comprehensive strategy for hinterland connectivity, CII said.

Six, ease of doing business reforms need to be carried out by the state governments for enhancing competitiveness with monitoring at the chief secretary level. Time-bound approvals and effective on-ground implementation of single window system across all states are required.

Further, allowing industries to directly purchase land from farmers, rationalisation of stamp duty, increasing threshold limits of certain labour laws and setting up of a single labour authority in the state for all inspections are recommended. States should also strategise for exports based on their strengths and develop export clusters. Seven, adequate funding for meeting quality standards and providing certification facilities is necessary to strengthen enterprise competitiveness, the report said.

Eight, on the external front, India needs to leverage existing free trade agreements (FTAs) for exports and sign fresh FTAs with large market nations. India must also diversify its export basket to include more goods that are traded globally, such as electronics and machinery.

Nine, for strengthening India’s participation in GVCs, the CII paper suggested openness to FDI for technology transfer. It also stresses on liberalization of the services sectors as services are embedded in manufactured goods. Gaps in standards and technical regulations must be bridged with more awareness and better facilities for exporters.

Ten, marketing promotion in top markets is essential. CII suggests promoting ‘Brand India’ and setting up a dedicated marketing agency for key markets as well as expanding the Market Access Initiative and Market Development Schemes.

The CII report includes specific measures for nine manufacturing sectors like automotives, chemicals, electronics, steel and textiles. India’s goods exports declined to $313 billion in 2019-20. Its share in global merchandise exports is 1.67 per cent, with a low share in top globally traded items. In services, it enjoys 3.54 per cent share.

Fibre2Fashion News Desk (DS)


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