Time for bold action on exports

Adopt Two-pronged Strategy: Deep, Structural Reforms and Fast-Track, Targeted Actions

- AJAY SRIVASTAVA

India's exports face a storm of external and internal pressures. The US has slapped a 50% tariff on most Indian goods, dealing a body blow to key sectors. Labour-intensive industries like apparel, textiles, shrimps, carpets, furniture, and jewellery, along with capital-intensive goods such as chemicals and machinery, now face export declines of up to 80%.

The European Union (EU) is next, with its Carbon Border Adjustment Mechanism (CBAM) set to impose new climate taxes on Indian steel and aluminum from January 2026.

But beyond these external shocks lies a deeper, self-inflicted crisis. India's export model is increasingly uncompetitive. High input costs—driven by expensive energy, credit, and logistics—inflate production costs. Labour rigidities and infrastructure gaps worsen delivery timelines. Meanwhile, shallow domestic manufacturing, especially in electronics, limits value addition and resilience. India's current export basket is no longer sufficient for achieving high growth. No trade agreement can substitute for stronger products and globally competitive pricing. As global markets become harder to access, India's inability to compete on price, scale, and quality could choke its export engine just when it's needed most.

To survive—and thrive—India must go beyond reactive measures. The time for patchwork fixes is over. India must act boldly to transform its export ecosystem. India needs a two-pronged strategy—deep, structural reforms to boost competitiveness and value addition; and fast-track, targeted actions to deliver immediate gains.