How low-hanging fruit could give India outsized gains

The Iran conflict has made two things clear: One, a new wave of globalization is coming, like it or not, from which further such shocks can’t be ruled out; and two, dependable dollar inflows from export earnings need to grow handsomely.

- PUJA MEHRA & ARPITA MUKHERJEE

The Iran conflict has made two things clear: One, a new wave of globalization is coming, like it or not, from which further such shocks can’t be ruled out; and two, dependable dollar inflows from export earnings need to grow handsomely.

In preparation of these new realities, India is striving to secure diverse export markets and integrate its economy into global supply chains. Besides obvious economic gains, this deepening of economic integration will also help increase India’s strategic choices, reduce risks and build leverage in geopolitical relations.

A good way of growing Indian exports is to reduce trade costs, which are very high at present, especially for small and medium enterprises (SMEs). India’s global ranking based on the Logistics Performance Index (LPI) has gone up from 44th in 2018 to 38th in 2023 among 139 countries, but it is still low compared to our competitors like China. India’s performance in the UNESCAP Global Survey on Digital and Sustainable Trade Facilitation (UNTF) has also improved. In cross-border paperless trade, India’s score rose from 28% in 2015 to 67% in 2021, but has stagnated since then; this calls for policy intervention.