New Delhi: The Economic Survey on Monday pitched for giving a push to the ongoing negotiations for the proposed free-trade agreements (FTAs) as these pacts will help in diversifying the country’s export basket and destinations.
It added that India has diversified its export destinations in the past 25 years, yet more than 40 per cent of the country’s exports is still accounted for by only seven countries.
India has been negotiating FTAs with several partners, both bilateral and regional, for the past many years with a view to promote India’s exports.
”A further push in this direction would help provide the institutional arrangements to, inter alia, diversify both products and destinations,” it said.
In a free-trade pact, two countries either significantly reduce or eliminate customs duties on the maximum number of goods traded between them. These pacts help provide a competitive edge to exporters.
Trade experts have stated that early conclusion and implementation of these agreements will help in boosting the country’s exports.
India is negotiating such FTAs with countries including the UK, Australia, European Union (EU), Canada and the UAE. It is also reviewing its existing trade agreements with nations such as Singapore and ASEAN.
”Negotiations are complete for agreement with the UAE and at the advance stage with Australia,” the Survey said.
It also stated that India’s merchandise exports touched USD 301.4 billion during April-December this fiscal.
”This shows that India is well on track as far as attaining the export target is concerned,” it said adding that out of an ambitious export target of USD 400 billion set for 2021-22, India has already attained more than 75 per cent.
”Sharp recovery in key markets; increased consumer spending; pent-up savings and disposable income due to the announcement of fiscal stimulus by major economies; global commodity price rise and an aggressive export push by the government have bolstered exports in 2021-22,” it added.
Initiatives like Remission of Duties and Taxes on Exported Products (RoDTEP), Developing District as Export Hub, and production-linked incentive (PLI) scheme will help in pushing the country’s exports and manufacturing.
The Survey said that owing to the recovery of global demand coupled with a revival in domestic activity, India’s merchandise exports and imports rebounded strongly and surpassed pre-COVID-19 levels during the current financial year.
The US, followed by the UAE and China, remained the top export destinations in April-November 2021, while China, the UAE and the US were the largest import sources for India.
It added that China’s share in India’s imports has reduced to 15.5 per cent April-November 2021, from 17.7 per cent in the corresponding period of the previous year, which reflects increased diversification of India’s import sources.
Further, it said that a strong rebound in exports and imports have led to an increase in the merchandise trade deficit.
It stood at USD 142.4 billion in April-December 2021, compared with USD 61.4 billion in the year-ago period.
Talking about global trade, it said that overall, the balance of risks for global trade is tilted to the downside and the biggest downside risk emanates from the pandemic itself, particularly with the resurgence of new variants such as Omicron.
In addition to the surge in global inflation, longer port delays, higher freight rates, shortage of shipping containers, shortage of inputs such as semiconductors, with supply-side disruptions being exacerbated by a recovery in demand, pose significant risks for global trade.
”Against this backdrop, India’s external sector has shown immense resilience during the year, which augurs well for growth revival in the economy,” it added.
On services trade, the Survey said India’s services exports recorded growth of 18.4 per cent to USD 177.7 billion during 2021-22 (April-December).
”This is mainly on account of the top-three computer, business and transportation services that constitute more than 80 per cent of total services exports,” it added.