Right markets for your products are necessary in today’s globalized world, to sustain growth and achieve success. India, a strong economy, high-tech manufacturing country with a young, technology-friendly workforce, is now a prime destination for export-oriented businesses.
India: A Powerhouse in Global Trade
India boasts a combination of strengths in the following areas: competitive manufacturing, diversified scope of exportable sectors and well-timed government schemes. The country has, for long, been one of the world’s leading commodities players in coffee, tea, spices, and gemstones.Through the “Make in India” initiative there has been a rapid growth in the area of manufacturing exports.
A country with a 7,516-km-long coastline and 229 ports is, by its very nature, well placed to enhance the trade role in international trade. Main improvements like reducing port turn-around times from 93.59 hours in FY 2013-14 to 48.06 hours in FY 2023-24 reflect a more determined effort toward modernizing infrastructures and streamlining operational processes.
Strategic government support for export growth
There have been three-pronged Indian government initiatives to boost the exports:
Strengthening Domestic Manufacturing: The Production-Linked Incentive (PLI) Scheme, launched in 2020, has a dedicated outlay of $26 billion to boost sectors like electronics, telecommunications, pharmaceuticals, and automobiles. So far, it has generated INR 3.20 lakh crore in exports and created over 6.78 lakh jobs.
Facilitating Easy Exports: There is a subvention for interest equalisation scheme under export credit. In the interest equalisation scheme, a component called the Market Access Initiative encourages firms to export through other markets.
Easing out Trade Policy: Foreign Trade Policy 2023-28 lays more emphasis on cross border e-commerce, grassroots-level exports and settlements in rupee.
Export Potential Unlocked
India’s export ecosystem is based on reforms that ease compliance and reduce costs. For example, the Advance Authorisation Scheme (AAS) provides for duty-free import of raw materials for export production. Likewise, exporters with a Letter of Undertaking (LUT) can send goods free of GST.
Some of the government measures are:
Duty-Free Import Authorisation (DFIA): This scheme provides duty exemption on raw materials after the export of finished goods.
RoDTEP Scheme: An allocation of INR 15,070 crore with remission in duties and taxes on export products.
NIRVIK Scheme: This Scheme provides financial support to all small and medium-sized exporters with low premium and insurance covering up to 90%.
Leading Sectors Driving Export Growth
India is expanding its export base beyond iron ore and agricultural products. Textiles, technical products, pharmaceuticals, and electronics are the main industries driving merchandise export growth in FY 2023–2024.Petroleum products accounted for 18.8% of total exports valued at $20,709.41 million.
States like Gujarat (30.18%), Maharashtra (14.66%), and Tamil Nadu (10.78%) lead the charge in export contributions. Meanwhile, countries like the US and the Netherlands serve as key destinations for Indian goods, from smartphones to petroleum products.
Expanding Trade through Strategic Agreements
The growing number of Free Trade Agreements(FTA) and Preferential Trade Agreements between India is another key driving force. India has inked FTAs with some of the key partners like the UAE, ASEAN, and Australia, whereas with the UK and European Union, India is holding negotiations in the hope that these agreements would further bolster trade.
Road Ahead
India’s export journey is characterized by continuous innovation and infrastructure development. The nation is bound to become a global export leader by utilizing digital solutions to expanding manufacturing hubs. For companies looking to enter foreign markets, India offers unparalleled potential due to its dynamic economic environment and strategic government policies.
India’s steadfast dedication to economic expansion and its rise as a dependable partner on the international scene are demonstrated by the progress it has made in increasing exports and promoting international trade.
