‘Merchandise exports take a hit’
India Exim Bank helping States to draw up comprehensive export strategies to tap full potential
Hyderabad: India’s merchandise exports reached $313.4 billion in 2019-20, registering an average annual growth rate (AAGR) of 4.7 per cent during 2015-16 and 2019-20. During the same time, imports grew at a higher AAGR of 6.2 per cent, reaching $474.7 billion in 2019-20.
As a result, India had a trade deficit of $161.3 billion in 2019-20. During 2020-21, up to September 2020, merchandise exports were recorded at $125.6 billion, a year-on-year decline of 21.1 per cent over the same period in 2019-20.
Services exports from India, on the other hand, were valued at $213.2 billion in 2019-20, growing at an AAGR of 8.6 per cent during 2015-16 and 2019-20. David Rasquinha, MD, India Exim Bank told Telangana Today, “Overall, India had a current account deficit of $24.5 billion in 2019-20, up from $22.1 billion in 2015-16.”
In 2019-20, while the top three segments of exports were petroleum products (14 per cent), precious metals & stones (12 per cent), and machine tools (seven per cent), the top three segments of imports were petroleum products (10 per cent), precious metals and stones (11 per cent) and electrical machinery (10 per cent).
During 2019-20, the top three States in terms of exports were Maharashtra, Gujarat, and Tamil Nadu, accounting for 21 per cent, 20 per cent and 10 per cent share in the country’s overall merchandise exports.
Developing strategies
India Exim Bank has been advising States on strengthening their export policies and promotion schemes. The studies undertaken by India Exim Bank have helped shape the export strategy of several State governments in the country, added Rasquinha.
For instance, India Exim Bank had prepared a paper titled, “Export from West Bengal: Potential and Strategy”, at the request of the State government in 2016. Subsequently, Exim Bank was invited by the government to draft the State Export Policy, which was consequently finalised by the State government, approved by the State Cabinet, and launched in 2018.
Similarly, India Exim Bank also entered into a memorandum of understanding with the Government of Rajasthan to facilitate export promotion. A comprehensive study on exports was undertaken, which has guided the export policy of the State and has led to the creation of an institutional framework. The organisation has also recommended creation of a Gem Bourse in Jaipur, which would create nearly 2,000 offices, boost exports of jewellery and create numerous jobs.
It had also prepared an export strategy for Madhya Pradesh, which has been adopted by the Directorate of Industries, as the official export strategy for the State.
Several States were advised to create ‘Export Promotion Councils’ to develop, promote and support export-oriented industries. “We would be happy to work with the Government of Telangana, should there be an opportunity (or a request) given by the State Government to us,” he added.
Policy framework
Currently, Telangana and eight other Indian States (Karnataka, Uttar Pradesh, Andhra Pradesh, Assam, Gujarat, Goa, Delhi and Jharkhand) have dedicated export policies. In addition, 14 States have finalised the State-specific action plan for agriculture export policy (AEP), which aims to double agricultural exports over the next five years.
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