Can you tell me the biggest fear of the post-COVID world? No, it’s not catching the infection; rather it’s the fear of the recession. The fear of a global slowdown turning into a deadly recession like that in 2008 was predicted, as Covid had locked us inside the four walls for more than a year. And the effect can be seen on the entire world, complemented by the Russia-Ukraine crisis.
The European Union, whose countries were once the mighty colonial powers, is today lining up for bread. To add to their fear, winter is coming. However, India does not fall into the list of countries fearing the global slowdown. With the looming fear of an economic slowdown, the Modi government, taking a precursor step, moved its focus towards exports. Exports are the key to not only keeping the economy afloat but also registering positive growth. Well, do I have data to substantiate my claim? Yes, I do.
How oil is adding up to India’s Export story
After the Russian President, Vladimir Putin, began his “military operation” in Ukraine, everything changed in the postmodern world, from how countries aligned with each other, to which was sanctioned, to international trade. At this juncture, India was pressured by the West to join the sanctions war against Russia. However, India, practising a real Non-Alignment Movement this time, unlike Nehru, decided to satisfy its own national interests. And India decided against the West.
We purchased Russian crude oil at a discounted price, a move that saved us from the COVID-inflicted global inflation. To add to that, crude oil is essential for India not just for consumption but also to keep its exports afloat. India has one of the biggest refineries in the world; we export a lot of refined petroleum products. The recent data suggests that with refined petroleum, India is making history in the context of international trade.
Read More- With booming rise in exports, India gives two hoots to global slowdown
Netherlands beats China, Brazil improves its position
As reported by The Financial Express, Netherlands, a small country beside the United Kingdom, has climbed two steps to become the third largest export destination of India. With this, Netherlands has beaten China and has moved ahead of Bangladesh to move two spots in the list of India’s top ten export destinations. Adding to the surprise, Brazil has shown a huge jump and has become the 8th biggest export market, which earlier occupied the 21st spot. Indonesia has also moved up seven spots to become the 7th largest export destination of India.
There is no change in the position of the US and UAE, as they continue to be the largest and second-largest India’s export destinations, respectively. However, there has been a jump. Exports to the US have climbed up 18.3% until August to $35.2 billion, while those to the UAE shot up 27.3% to $13.8 billion.
How India increased its exports to countries
Well, the question here is that if the countries have jumped spots, what export has gone up to complement the move? The simple answer to it is petroleum products. In the case of the Netherlands, while the export of chemicals and pharmaceuticals remained substantial at $513 million and $219 million, respectively, it is the petroleum products that have witnessed a huge leap. India’s exports to the Netherlands were driven mostly by a 238% jump in despatch of oil products until August.
The cases of Brazil and Indonesia are no different. The exports to Brazil grew by 70.9%, whereas the exports were driven by a 299% jump in supplies of petroleum products, which amounted to $2.3 billion.
India’s exports to Indonesia jumped 43% to $4.8 billion, dominated by petroleum products, which saw a leap of 144%. The other products India exported were cereals, sugar, and chemicals.
Also Read-With focus on service exports, India is moving towards a truly “Developed Economy”
The schemes that write India’s growth story
While petroleum products have made a significant leap, it has taken several years and several schemes to transform India from an importer to an exporter. Who can forget the speech of Prime Minister Narendra Modi during the launch of Make In India, where he said that even for the smallest of products we are dependent on other countries.
Just take the example of the toy sector. With the Make in India scheme, the country’s imports are down by 70 percent while there has been a surge of 61 per cent in exports. The scheme has helped the domestic manufacturing sector achieve size and scale, which was earlier neglected by our great economist ministers, who had surpassed the manufacturing sector and had directly jumped onto the service sector.
Furthermore, the PLI schemes have proved to be a game changer for Indian manufacturing as well as exports. The Modi government launched the Production Linked Incentive (PLI) for various sectors with the singular intent of boosting production, manufacturing, and exports. The PLI also plays a great role in keeping a tab on the trade deficit of India. This could have been done by a visionary leader like Prime Minister Narendra Modi, who on time identified India’s manufacturing capabilities.
Trade and Diplomacy go hand in hand
Exports are extremely important for any modern-day economy as they offer people and firms a much larger market for their goods. This improves not only the country’s economy but also its global stature. And the responsibility to provide the firms, present in the country, an opportunity to export and expose them lies on the shoulders of foreign policy.
The reason why India has emerged as the global exporter is because the economic policies and foreign policy of the Modi government have been to foster economic trade and encourage exports for the benefit of trading partners, thus enhancing India’s role at the global level. The reason why Brazil is importing from India and the other nations lies in diplomacy. As Brazil is a part of the BRICS grouping, there has been a push for internal trade within the grouping.
Foreign diplomacy decides the terms of trade and the trading partners. Hence, the Modi government has struck the right chords by choosing to stand firm with our foreign policy at the global level.
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