3.10. Challenges in International Trade for India

The challenges for India on the trade front are many. While India has successfully diversified its export basket, more needs to be done on the product diversification front. It also has to reposition itself in its traditional areas of strength like textiles and leather & leather manufactures where it has lost considerable ground, while at the same time making forays into new areas. With multilateral trade negotiations stalled, and RTAs on the rise, India also has to follow a strategic regional trading policy focusing on the potential technology-intensive items in the more important RTAs. Though geopolitical considerations are important, India may have to bargain more in its regional trade negotiations, particularly in cases where livelihood concerns of large pockets of the population are involved, There is also need to address the inverted duty structure in sectors like electronics, textiles, and chemicals and the artificial inverted duty structure caused by some FTAs/RTAs. On the services front, a gold mine of opportunity in sectors like tourism including health tourism is waiting to be tapped.

Thus there are many micro, port-specific and sector-specific issues that need urgent attention. These are related to infrastructure, trade facilitation, tax and tariffs, and credit, and can realistically be addressed in the short and medium term. Addressing these issues, as is currently being done by the government, can exponentially promote India's export growth.