India’s export dream & hard facts

The Indian government is, according to news reports, in the final stages of setting up a high-level body to cut regulatory hurdles and red tape.

- DEBASHIS BASU

The structure, operating under the National Manufacturing Mission, is meant to slash bureaucratic delays and help triple merchandise exports by 2035.Tripling exports in nine years implies a compound annual growth rate (CAGR) of around 13 per cent. Is this credible? In theory, nothing is impossible. China has shown that truly exceptional outcomes can be achieved under exceptional circumstances. In practice, however, sustaining export growth of this magnitude would require no lost years, a buoyant global trading system rather than the emerging “trade fortresses” triggered by United States (US) President Donald Trump’s tariffs, no global downturns, no prolonged policy slippage, and manufacturing exports growing faster than gross domestic product (GDP) year after year for a decade.

India would need, not merely a good run, but something close to the near-peak performance that was once achieved by the Asian tigers in their best years. Even then, those episodes occurred when China was a minnow rather than the dominant force looming over global manufacturing and trade as it is today. If this is genuinely India’s ambition, history offers some instructive benchmarks.