THE EXPORT GROWTH CONUNDRUM

FOCUS ON CERTAIN COUNTRIES AND PRODUCTS HAS LED TO INCREASED EXPORTS CAN THIS BE SUSTAINED?

- JOEC. MATHEW

INDIA'S MERCHANDISE foreign trade data for October 2024 came packed with a pleasant surprise. The export value of 10 key products was the highest ever in India's trade history. Non-petroleum product exports were also at a record $34.61 billion. A beaming Sunil Barthwal, commerce secretary, said the October trade performance was not an aberration. “Not only has our overall exports progress been good, we have broken all records in terms of non-petroleum product exports for April-October too. If we continue in this manner, we are going to cross $800 billion of exports this year.”

While engineering goods export during October rose 39.37% against a year ago, export of electronic goods was up 45.69%, organic and inorganic chemicals 27.35% and labour intensive readymade garment exports 35%.

What made the export performance sweeter was that it came when global merchandise trade is going through a rough patch. World merchandise trade value had fallen 5% and global trade volume contracted 1.2% in 2023. The latest global trade update of UN Trade and Development (UNCTAD) notes global trade in goods has grown at 2% in 2024. UNCTAD also observes that uncertainty looms over 2025 trade outlook, clouded by potential U.S. policy shifts, including broader tariffs that could disrupt global value chains and impact key trading partners. However, despite all these, Indian goods exporters have put up a good show.

Barthwal says growth in Indian exports is the result of export-friendly policies and government interventions. “Our strategy of focusing on certain sectors and countries is perhaps now yielding results. Improved manufacturing competitiveness due to PLI schemes are yielding results,” he says.