Our manufacturing must adapt to a dynamic world

The global economic landscape is becoming increasingly interlinked and dynamic. Despite multiple shifts, 2023 saw global merchandise exports worth over $24 trillion, an increase of 6% over 2019, demonstrating resilience in the face of disruptions.

- SANJEEV KRISHAN

Global value chains accounted for 52% of global trade in 2022, with suppliers, firms and customers across the world showing a high level of interconnectedness. Yet, a shift in perspective is underway, with a number of large economies turning towards 'protectionism,' thus increasing both trade and geopolitical conflicts.

Amid this uncertainty, India's relationship with its largest trade partners—China and the US—is also evolving. The recent border deal and meeting between Prime Minister Narendra Modi and President Xi Jinping could pave the way for better India-China relations and trade. Concurrently, the outcome of the US presidential elections foreshadows policy changes that can reshape the future of global trade. Given that imports account for almost 14% of the US gross domestic product (GDP), any imposition of high import tariffs will hurt both consumption within the US and export-focused economies across the Global South.

In this context, India's growth journey, with its ambitious Viksit Bharat target by the centenary of its independence, needs to be charted out strategically. Increasing exports will play a key role, and the government has set a target of $1 trillion worth of merchandise exports by 2030 and $1 trillion of service exports.