Budget 2020-21: If India has to be a 5 trillion dollar economy by 2025, exports of goods and services should be at least around 1 trillion dollars.
Budget 2020 India: Increasing exports may play a vital role in taking India a step closer to Narendra Modi-led government’s $5 trillion economy goal but it has been muted in recent months. To pursue export-led growth, the coming Budget is likely to include various steps on how the exports from India can be pushed. Finance Minister Nirmala Sitharaman held the third pre-budget consultation meeting today, which included discussions on various areas including measures for promotion of exports amid rising protectionist tendencies. Exports form the backbone of a country’s current account and thus it becomes important to maintain its momentum.
“If India has to be a 5 trillion-dollar economy by 2025, exports of goods and services should at least be around 1 trillion dollars. With the current level of performance, India will not be able to pursue an export-led growth needed to drive the high GDP growth, says FICCI Pre Budget Memorandum report. It also says that through the coming Budget 2020, India needs to adopt a more strategic approach, especially with rising protectionism around the world.
Sharp moderation in exports of goods and services along with a few other factors such as private consumption and capital formation have led to slower growth in the last two quarters. India’s total merchandise exports contracted by 1.5 per cent during April-August 2019, compared to 15.7 per cent growth on-year. Similarly, imports contracted by 4.4 per cent, compared to 8.7 per cent growth in the same duration.
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However, amid the ongoing trade war, with costlier goods and reduced efficiency of China to export, the global importers may look at India to fulfill their demand. Importers have already reached out to Indian sellers in sports goods, toys, stationery, cables, and electronics parts categories, according to FICCI.
Ahead of the Budget 2020-21, the government has recently announced various measures such as export-related incentives, finance, credit, and facilitation, which may help in boosting India’s exports. Apart from this, the FICCI report suggests that comprehensive trade and economic cooperation agreement with the EU should be expedited as it will provide greater market access for India’s exports. Also, it is said that negotiating existing Free Trade Agreements at the time of their review can also work to overcome the restrictions faced by India and its partners.