BEYOND TRADE DEALS

To unlock export potential, the government will have to undertake domestic reforms that make India's manufacturing and services competitive, cut costs, and streamline logistics

- By AJAY SRIVASTAVA, FOUNDER, GLOBAL TRADE RESEARCH INITIATIVE

AS INDIA APPROACHES its 100th birthday in 2047, the country has set bold targets: building a $40-trillion economy and achieving $10 trillion in annual exports. While these numbers look impressive, India's current export base, around $825 billion, shows just how steep the climb will be. Success will need structural reforms that strengthen manufacturing, expand services beyond IT outsourcing, and firmly embed the country into the most valuable parts of global supply chains.

FROM ASSEMBLY TO PRODUCTION

About 80% of global trade revolves around goods, making manufacturing the backbone of any strong export strategy. Yet India's competitiveness has been slipping, especially in traditional sectors like textiles, while its booming electronics sector still relies heavily on imported components, mainly from China.

This wasn't always the case. Back in the late 1980s, India was neck and neck—or even ahead—of China in areas like computer hardware, pharmaceuticals (especially APIs), and textiles. But while China invested heavily in large-scale manufacturing, workforce training, and innovation, India took a different path. After its 1990s economic reforms, it cut tariffs and removed industrial licenses but ignored building a deep, resilient manufacturing base.

A particularly damaging decision came in 1996, when India signed the WTO's Information Technology Agreement, committing to zero tariffs on a wide range of electronics. This left Indian producers vulnerable to cheap imports, especially from China, which soon surged ahead to dominate mobile phones, laptops, solar cells, electric vehicles, and critical minerals.