Answer:

India’s merchandise exports share in world exports increased from 0.5 per cent in 1990 to only 1.7 per cent in 2013. As per economic survey 2013-14, India should aim to increase its share in world exports to at least 4 per cent in next five years. However, achieving this is going to be a big challenge and some of the major issues that need to be tackled are:

1. Product Diversification: Till now India’s focus has been on exporting whatever it can. But now it needs to shift to items for which there is world demand and we have basic competence. A demand based export basket diversification with focus on three Es– Electrical, Electronic and Engineering goods is needed.

2. Export Infrastructure: Export infrastructure, especially port related infrastructure, needs immediate attention.

3. Focus on useful Regional Trading Blocks: India should ready itself to face new threats like TAFTA (Trans-Atlantic Free Trade Agreement). There is need to have some new useful RTAs/FTAs/CECAs.

4. Inverted Duty Structure: This refers to the situation in which import duty on finished goods is lower than import duty on raw materials imported from other countries. This may happen due to carelessness while negotiating FTAs. So, a reality check of existing FTAs, RTAs and CECAs is needed.

5. Export Promotion Schemes: There are multiple and overlapping export promotion schemes with many focus markets and focus products with items and markets getting added each year. There is a need to rationalise these schemes to a bare minimum which will help in reducing transaction costs and trade litigations.

6. SEZs: SEZ policy needs a reboot as fresh investments are slowing down and greenfield SEZs have not really taken off.

7. Trade Facilitation: India ranks 142 in ease of doing business and 132 in trading across borders. India needs 9 export documents as compared to 3 in Singapore. There is a need to remove the delays and costs on account of procedural and documentation factors.

8. Inter-twining of domestic and external policy: This is especially relevant to agricultural exports as domestic shortages or excesses result in a knee-jerk reaction for agri-export policy.

These issues, if addressed, could lead to exponential gains for India’s exports.