In 2015, India’s 5-year Foreign Trade Policy (FTP) had laid down an annual export target of $900 billion of goods and services to be achieved by 2020. It had sought to increase India’s share in global market exports to 3.5% from the current 2%. However, as per the recent Mid-Term Foreign Trade Policy Review, it seems that India has struggled to even maintain its paltry 2% share.
Further, India’s world exports remained limited to sectors which account for less than one-fourth of global exports. Its top 5 sectors- petroleum products, cut and polished gem stones, gold jewellery, drug formulations and biologics, and readymade garments (less than 5% in textile and 2% in clothing exports) largely bring in only value-addition and are dependent on other countries for primary resources, thus remaining a peripheral player in global trade.
As India continues to forge regional and global free trade agreements, it must strive to increase its share in global exports by fortifying its industries against challenges such as low-productivity, financial and labour constraints, apart from sluggish global demand and falling commodity prices.
This post has been authored by Aditi Vasani of West Bengal National University of Juridical Sciences.
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