New FTAs, comprehensive agreement on goods and services, land and power to boost exports: PHDCCI Study

Exploring new free trade agreements (FTAs), reducing the cost of business to increase India’s export competitiveness, lower interest rates and better export infrastructure would help reach the government’s target of $2 trillion in exports by 2030, a new study has suggested.

PHD Chamber of Commerce and Industry in a new report titled ‘India’s Emerging Export Dynamics: Vision $ 2 Trillion Exports by 2030’ has also identified 75 potential export products based on global demand dynamics and India’s supply capabilities to enhance the volume of such products that are already being domestically produced. These include items such as seafood, iron ores, vaccines for human medicine, cotton and textiles and wooden furniture.

“Currently, these 75 products contribute around $ 222 billion, which is around 50% of India’s total exports. At the global level, these 75 products have significant presence in the world exports, whereas India’s share of these 75 products is only 6% of the total world exports,” said the report, which was released on Thursday.

Noting that exports are crucial for a nation’s economic growth as they help increasing domestic jobs, infrastructure, demand and gross domestic product, the report said Indian exports trajectory is showing a remarkable robust performance due to several measures being taken by the government.

“India has emerged as the top most export (merchandise+ services) resilient economy amongst the 20 leading exporters. India exhibits a 14.8% average annual growth of total exports (in term of volume) as in post-Covid period compared with 1.3% average annual growth of total exports in pre-Covid period,” it further said.

On further measures to boost exports, it suggested that the new free trade agreements should be comprehensive treaties inclusive of agreement on goods as well services as they will expand and offer diversification given that India has a comparative advantage in the service sector. Till now, India has signed 13 FTAs.

It also highlighted that there is significant potential to increase exports and reduce import costs in the industry by exploring new FTAs with economies like the EU and the UK. New FTAs will increase India’s participation in the global value chain, the report noted.

Further, it called for lower costs of inputs including capital, power, land, logistics and labour.

“Going forward, ease of doing exports with calibrated reforms by the government will be crucial to achieve the target of $ 2 trillion by 2030. We need to focus on reducing the cost of business and increase the ease of doing business to enhance the competitiveness of the domestic manufacturing,” said Sanjeev Agrawal, President, PHDCCI.

During the last 10 years, exports have accelerated significantly, rising from $375 billion in FY11 to $770 billion in FY23.

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