India needs to increase its share in merchandise exports from 1.67% to 5%

Budget 2021: India’s share in goods exports needs to be increased to 5 percent by 2025

Budget 2021: Given that exports have emerged as an important growth driver and have the potential to spur economic recovery, the country’s share of the world’s merchandise exports needs to increase from the current 1.67 percent to five percent by 2025, industry body Indian Industry The Confederation (CII) stated in its Pre-Budget Memorandum 2021-22. CII suggested that greater participation in global value chains (GVCs), enhancing trade infrastructure, not exporting good and taxes, as well as reducing the cost of export credits are some of the measures that India has in world trade exports Can increase the share.

Global Price Chains:
To improve the country’s participation in the global value chain, CII suggested that it is important to reduce import duties, which have been raised over the years, as high tariff rate policy creates uncertainty and prevents the country from becoming Is part of the global value chain. An open and convenient import environment is also important to attract global companies and ensure competitive access to intermediate goods.

Budget 2021 may announce the establishment of a task force in the Department of Commerce, to identify and strategize the country’s participation in such global value chain opportunities in consultation with industry. The task force can identify key global value chain opportunities and announce targeted policies to attract both domestic and foreign investment in those areas.


Reducing the cost of export credit:
The average lending rate in the country is higher than other emerging economies. Due to this, Indian exports to the international market are often ineffective. To mitigate the problem, the government offers an interest rate parity scheme to MSMEs, through which it provides an interest rate subsidy of five percent on pre-post-shipment credit. It aims to provide loans to MSME exporters at globally competitive rates.

However, buyers in international markets do not differentiate between MSME exporters or large exporters, but run on quality, cost and reliability. CII suggests that the same scheme should be extended to all exporters rather than being restricted to MSMEs.

Additionally, subsidies should be linked to global rates rather than fixed five percent subsidies. The definition of exporter should also include those manufacturers who sell export houses. The scheme should be extended for the next two years after March 2021 for exporters and producer-exporters. The plan should also increase overall allocation to enable more enterprises to reach



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