Global Trade Research Initiative:
- According to the Global Trade Research Initiative (GTRI), weak global demand and recessions in major economies will moderately impact the Indian economy and exports in 2023.
- Global trade research initiative suggests that India should focus on reducing its energy import bill to improve its current account.
- The report highlights the need to explore local oil fields and increase production to decrease energy imports substantially.
- The efforts by the US to create alternate supply chains excluding China are leading to global supply chain restructuring and the relocation of manufacturing firms, which presents an opportunity for India.
- However, India should evaluate the impact of new provisions in free trade agreements (FTAs) on domestic policies and ensure strategic autonomy.
- Despite global uncertainties, India’s exports are expected to reach USD 440-450 billion in 2022, and merchandise imports are likely to be around USD 725 billion.
- GTRI emphasizes the need for celebrations as India achieves the highest-ever export turnover despite the challenging global conditions.
- The report suggests diversifying export markets and product portfolios, adopting renewable energy sources, and improving export incentives and trade procedures to enhance Indian exports.
- Investments in infrastructure development, including ports and logistics networks, are also essential for improving export efficiency.
Factors Influencing Indian Exports:
- Geopolitical tensions, trade disputes, and the aftermath of the COVID-19 pandemic result in weak global trade demand.
- Recession in major economies reduces consumer spending power and import demand.
Strategies to Enhance Indian Exports:
- GTRI suggests reducing the energy import bill to improve the current account balance.
- Emphasizes the adoption of renewable energy sources, energy efficiency measures, and domestic energy production.
- Diversification of export markets and product portfolios to reduce reliance on specific markets or sectors.
Enabling Factors for Export Growth:
- Favorable policies, such as export incentives and streamlined trade procedures, can support robust export growth.
- Investments in infrastructure development, including ports and logistics networks, enhance export efficiency.
Conclusion
Overall, the outlook for India’s exports in 2023 is positive. However, there are some risks that could dampen growth. If these risks are avoided, India’s exports could reach $1 trillion by 2025.
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References:
International Trade Administration [1].
FAQ’s:
The Global Trade Research Initiative (GTRI) is an organisation dedicated to conducting research and providing insights on global trade. It analyses various aspects of international trade, including economic trends, policy impacts, market dynamics, and trade performance, to generate valuable information for businesses, policymakers, and researchers.
The main factors that will drive India’s export growth in 2023 are the continued growth of the Indian economy, the rising middle class in India, and the increasing integration of India into the global economy.
The Indian economy is expected to grow by 7.5% in 2023, which will create demand for Indian exports.
The rising middle class in India is expected to drive demand for a wider range of goods and services, which will benefit Indian exporters.
India is becoming increasingly integrated into the global economy, which will give Indian exporters access to new markets.
Some of the key challenges that Indian exporters face include:
Competition from other countries: India faces competition from other countries, such as China and Vietnam, which are also major exporters.
High cost of production: The cost of production in India is relatively high, which makes it difficult for Indian exporters to compete with exporters from other countries.
Lack of infrastructure: India’s infrastructure, such as roads and ports, is not as well-developed as in some other countries, which can make it difficult for Indian exporters to transport their goods to market.
