View: India needs to focus on export earnings

economictimes.indiatimes.com:

On a more positive note, the last three years have seen an easing in the stagnation of exports. Since 2020-21, Indian exports have grown in value as well as volume and their composition is seeing a perceptible change. While the share of traditional exports such as textiles and apparel, leather goods, iron ore, minerals, light engineering goods and gems and jewellery has declined, the share of electronics, machinery, equipment, petroleum and branded drugs has increased.

There has been diversification in the countries buying Indian commodities, with South Asian nations emerging as a substantive destination for India’s shipments. It would appear that the trade agreements entered into with a host of nations and regions have also begun to yield dividends. Services have come of age in our export trade.

With services now accounting for $320 bn or 4% of global trade, and the fact that their labour content is more favourable, their continued growth deserves organised encouragement. Besides software, other segments holding out promise include fintech, banking and insurance services, hospitality, biotech, logistics and medical care. These are all sunrise industries with fairly high-skilled labour intensity.

With our comparative advantage in wages existing virtually across the board, it is a natural corollary to build on this success and diversify into new service areas, including ecommerce-based ones. India must become more discerning when selecting goods to be accorded greater weightage in the export basket. Export of imported crude oil by way of petrol, diesel or petroleum products has low value addition.