India’s integration with the global trade in general and export in particular are at an important juncture today. With downward pressure of commodity prices coupled with international currency fluctuation and delayed recovery in major markets, Indian export has been constantly falling in the last few months. The external sector factors will continue to remain volatile in the near future. In this challenging time, India needs domestic policy level support that can boost export competitiveness. To effectively increase the contribution of exports to the GDP of the country, we need to increase the relative value addition in our production and also explore alternate high growth markets. To go up in the ladder of production value chain, we have to use highly qualified labor and technology, which will give India an edge in its foreign trade. In this situation, private sector investments have become even more important to the Indian growth story. Investments have to be the key enabler for increasing production capacity in both value and volume terms.
This edition of Policy Watch looks at some of the important issues that continue to impact the overall export performance of India and brings forth the key policy interventions that need to be taken up on priority.