A recent study published by the Export-Import Bank of India (India Exim Bank) says that the Government of India should focus more on the glitches and shortcomings in their policies, rather than building new strategies to create a better operational environment and promote export. The study titled, ‘Domestic Constraints for Exports in Select Sectors’ analyses the constraints and restrictions faced by the Indian exporters in the industries like electronics (particularly mobile phones), textiles, clothing, gems and jewellery, auto and auto-components, and pharmaceuticals.
The requirement of improvement in the operational conditions and efficiency of the policies
The Study identifies the major areas of concern for the exporters across different sectors and includes data on various subjects like direct government intervention to reduce the port costs, incentives based on the production, guiding business keeping in mind the phase out of Merchandise Exports from India Scheme (MEIS), addressing the delays in approval and refund, providing custom clearance by the Government, etc. It also studies the impact of immediate refund of GST on individual sectors and expects to register a double-digit growth. It suggests that an immediate refund of GST can increase the overall GDP by 2%, exports by 7%, aggregate imports by 6%, and overall employment by about 4%. There are medium to long term interventions mentioned in the Study to improve the policy landscape of manufacturing and export.
Piyush Goyal talks of the vision of an excellent export environment in India
The study was released by the Hon’ble Minister of Commerce and Industry, and Railways, Govt. of India, Mr Piyush Goyal, where he also highlighted the policies being undertaken by the government to boost export, and enhance the standards of Indian exporters. Addressing the webinar organized by the EXIM Bank on Saturday, Goyal also said that the exports will automatically increase if the products are “good and competitively priced.”
He talked of his vision of India as a global player in various sectors, and said, “There is no need to segregate between products for exports and domestic sector. We require quality, good technology and scale, though some support may be needed at times.” To expand the trade further, India needs to target the developed countries, as per Goyal, who added, “We need to penetrate the developed world where we can leverage on the lower labour cost or our skills. When we are going to try and export to Africa and Chile, we’ll be competing with people who are already very low-cost & low quality. You want to relegate the nation to that level? I don’t think so.”
Observation of the Exim Bank MD
The Managing Director of India Exim Bank, David Rasquinha addressed the global impact of coronavirus and said that despite several negative implications of the pandemic, India now has the opportunity to enhance the Global Value Chain (GVC) integration, as major economies are now looking for alternative suppliers to strengthen their supply chains. Rasquinha also noted that the Exim Bank India has suggested strategies to encourage foreign investments for GVC integration and also build a competitive edge.
Observations by The Policy Times
- Instead of making plans and failing at their implementation, the government should work upon finding the loopholes in their policies.
- The current export policies are really not in favour of some of the premium exporters and thus, revisions are also required.
- Instead of making decisions based on trends, the government should interact with the exporters and entertain their inputs too.
- The Freedom of Trade Index puts India at a very low segment and so, the country should also work towards developing better foreign relations and relaxing their terms of export and import.