India eyes $900 billion target for exports after a record year
NEW DELHI: After record goods and services exports of $770 billion in 2022-23, the government is considering a target of $900 billion in 2023-24, officials familiar with the matter said, asking not to be named.
The number is not final and the process to fix a “realistic” target is on, with a focus on new export segments such as e-commerce and non-IT services, the officials added.
The government will take a final call only after consulting all stakeholders, considering granular trade data, and global forecasts, but it will certainly strive for “at least” $130 billion more in FY24 as compared to FY23, which is about 17% annualized growth, they said. India’s overall exports grew 14% in 2022-23 (over the previous year).
“Much will depend on global demand as exports are dependent on expansion of key overseas markets. It also depends on exporters’ confidence, which is buoyant with record overall exports in last financial year,” one of the officials said. Exports are up by $94 billion in 2022-23 despite massive headwinds, hence an additional $130 billion is not impossible even if global situation does not look up dramatically, he added.
A second official said the process to determine exports target for FY24 is “a work in progress” and that any growth on a higher base of $770 billion will be a challenge in this current global economic scenario. He was referring to a weak global demand due to the tightening of interest rates by many central banks to tame inflation. But there is cause for cheer, he indicated.
“One positive factor is the WTO [World Trade Organisation] forecast for trade growth. It revised global merchandise trade volume growth to 1.7% in 2023, up from its October 2022 estimate of 1%. GDP [gross domestic product] growth estimates of major markets would also influence our target for the current financial year. Besides, stakeholders, experts and Indian missions will be consulted to arrive at a realistic number,” he said.
The government is incentivising exports through its “Make in India, Make for World” and the Rs 2 lakh crore-Production Linked Incentive (PLI) schemes that has worked well, particularly for sectors like electronic exports, the second official said. The government will give more thrust to exports through such schemes, he added. Electronics, one of the top 10 items of India’s merchandise exports, saw 5.7% growth in its share in 2022-23 at $25.39 billion as compared to 3.71% in FY22.
The second official also said that India will focus on districtlevel participation and leveraging e-commerce as envisaged in the new Foreign Trade Policy (FTP) announced on March 31. E-commerce exports have the potential to grow to $200-300 billion by 2030. “Besides IT -related exports, we will also leverage non-IT exports such as financial sector, transport sector, tourism, accounting and legal services.”
Two industry experts said on condition of anonymity that an additional $100-130 billion overall exports (over $770 billion achieved in FY23) is possible with new focus areas, but that the government must reduce procedural hassles. This was one of the reasons for poor performance of gems and jewellery sector in 2022-23, they pointed out.
“The gems and jewellery sector could not meet the target because of procedural hassles that hampered supply of gold and silver for exports. Besides that, there is a need to improve the Export Data Processing and Monitoring System (EDPMS) for this sector. If the two issues are resolved, the sector can easily achieve $44 billion exports in 2023-24,” said Gem Jewellery Export Promotion Council’s regional chairmannorthern region Ashok Seth.