- Under the leadership of Goyal, the Department of Commerce is being rejigged to achieve the target of 2 trillion dollars in export by 2027.
- Previously the Economic Survey of 2019 argued that investment and exports will be the key driver of economic growth in the coming years given the fact government aims to follow the East Asian economic model.
- Agriculture export would be around 12.5% of India’s total commodities export (400 billion dollars) and 7.5% of the country’s total export (650 billion dollars).
In order to increase India’s exports, Piyush Goyal is leaving no stones unturned. Under the leadership of Goyal, the Department of Commerce is being rejigged to achieve the target of 2 trillion dollars in export by 2027. Considering the fact that the total export in FY 21 was 495 billion dollars, this is a very ambitious target. However, the exports grew exponentially in the last few months and are expected to reach around 640 billion dollars.
The commerce and industry ministry said in a statement that a strengthened negotiation ecosystem and a dedicated ‘Trade Promotion Body’ to drive overall promotion strategy, export targets, and execution, besides an inter-ministerial Trade Remedies Review Committee for transparency in investigation outcomes, have been proposed to be set up.
Previously the Economic Survey of 2019 argued that investment and exports will be the key driver of economic growth in the coming years given the fact government aims to follow the East Asian economic model. This was a key departure from the Anglo-American economic model that banks on consumption as the key driver of economic growth. Given the fact that the Anglo-American model provides sub-5 per cent economic growth while the East Asian model gives around 7-8 per cent growth, Economic Survey batted fully for the latter.
And around two and a half years down the line, the impact of the steps taken by the government is already visible in rising investment and exports. With the rejig in the Department of Commerce, a lean and resilient system will be built to make the country a net exporter by 2027. The last few months have been exceptionally well for Indian exports with near 20 per cent month-on-month growth.
For the first time in its history, India’s agriculture exports are set to cross 50 billion dollars in FY 22. The exports of the country are growing exponentially and the total commodities export is expected to touch 400 billion dollars, while services export is estimated to be around 250 billion dollars.
Agriculture export would be around 12.5% of India’s total commodities export (400 billion dollars) and 7.5% of the country’s total export (650 billion dollars).
In the last two years, India’s agriculture has witnessed very good growth owing to the good monsoon. The exports are growing because agricultural patterns were disturbed in traditional agriculture export powerhouses like China, Brazil, and Russia.
Apart from agriculture, textiles, Information technology, gems & jewellery are also growing. This is an opportunity for India to build on this movement to set out the export-driven economic growth model.
The aim of a 5 trillion dollar economy by 2025 cannot be achieved without an influx of capital by foreign companies to set up factories from where they will export to countries around the world, as seen in mobile phones factories. With the PLI scheme, India is slowly becoming the next factory in the world. Even the staunchest critics of the current administration strongly believe that PLI works and not that it needs any reaffirmation from them, the results speak for themselves.
The direction of India’s political economy is set now. Sanjeev Sanyal, the Principal Economic Advisor who took the post almost five years ago in February 2022, was very clear that India needs to take the East Asian path of an investment-led export-driven economy. It took him some time to convince his colleagues in the Finance ministry but by 2019, the slow-moving bureaucrats bought the idea, and two years down the line, India is looking to become the next big export powerhouse of the world.