Ajit Ranade: India needs more sectors to be reliable dollar earners

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Subscribe to enjoy similar stories. India presently has more than a quarter trillion dollars of essential imports. These include crude oil, coal, edible unrefined oil, fertilizer, steel and copper.

This list does not include defence or pharmaceutical intermediates, which could also be called essential. Domestic production capacity for all these is unlikely to become ‘atma nirbhar’ in the near future, even as demand will grow as India chugs at a 7% or 8% growth rate. These critical imports feed India’s energy and food needs (edible oils) as well as downstream industries such as automobiles and electronics.

Imported pharmaceutical ingredients and special minerals are needed for healthcare and the renewable revolution. To pay for all these crucial imports in dollars, we need to earn enough foreign exchange consistently for the next decade. Which are our reliable dollar earners? The two strong dependable export items that have grown steadily are inward remittances (clocking $129 billion this year, the highest in the world) and software services (exceeding $200 billion).

Both can be said to be de facto exports of skilled or semi-skilled labour. This is India’s big competitive advantage. Sustaining this edge, especially in software, will need climbing the value ladder and confronting the challenge of artificial intelligence (AI), which threatens to eliminate most of the low-end coding work that was outsourced to India.

The rapid growth of Global Capability Centres (GCCs) catering to the world’s best corporations is a promising development, and soon there will be more than 3,000 such GCCs. Inward remittances have outpaced foreign direct investment and need to be encouraged. They come from millions of workers who are at the