EconSurvey
India needs roadmap for trade amid greater global protectionism
This story was originally published at 18:44 IST on 31 January 2025
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--India's external sector resilient amid global headwinds
--Need forward-looking trade path on greater global protectionism
--Need to improve India's global competitiveness by deregulation
--Must cut trade costs, boost export competitiveness
--Much remains to be done to enhance trade competitiveness
--Aggressive trade policies pose risk to India's mfg exports
--Geopolitical tensions pose risk to India's mfg exports
--India can benefit from global industrial diversification
--CEA: India's growth can impove if export growth picks up
--CEA: Tough to assess effect of other nations' trade policy on India growth
--CEA: Given global context, we must raise the game to level playing field
--CEA Nageswaran: Nations recalibrating towards domestic priorities
--CEA Nageswaran: Period of hyper globalisation has ended
--CEA: End of rapid world trade growth clouds India's export growth outlook
NEW DELHI – India needs to assess the current situation of rising global protectionism and accordingly develop a forward-looking strategic roadmap to support its exports, according to the Economic Survey for 2024-25 (Apr-Mar), tabled in Parliament on Friday. The roadmap holds significance against the backdrop of developed economies planning to impose tariffs as well as non-tariff barriers.
On the one hand, US President Donald Trump has threatened to impose high tariffs on all countries that have a trade surplus with the US, including India, while on the other hand, the European Union's carbon tax and deforestation laws are possible non-tariff barriers that may impact India's exports growth. India had a trade surplus of $35.32 billion with the US in FY24.
The author of the Economic Survey, Chief Economic Adviser to the Government, V. Anantha Nageswaran, said that the period of hyper-globalisation has ended as all nations are now prioritising their domestic sector. The end of rapid world trade growth clouds India's export growth outlook, Nageswaran said at a press conference after the Economic Survey was presented in Parliament.
While it is difficult to give a specific assessment of the impact of other nations' policies on India's growth, the GDP growth projection of 6.3-6.8% for FY26 given in the Economic Survey has factored in the likely implications of such policies, Nageswaran said. The Economic Survey has mentioned that such geopolitical developments and aggressive trade policies pose a risk to India's manufacturing exports.
Indian merchandise exports have already been under pressure for over a year now on account of sluggish demand from the European market and other developed economies. It grew by only 1.6% in Apr-Dec after contracting 3% in FY24. India's growth can improve if export growth picks up, CEA said, adding that India needs to up its game on domestic growth.
There is a lot of scope for improvement in India's global competitiveness, with deregulation being a key measure in this regard, the survey said. "To strengthen its competitiveness and further integrate into global supply chains, the country can focus on reducing trade-related costs and enhancing export facilitation to create a more vibrant export sector," the survey added.
Indian exports can also benefit from global industrial diversification, according to the survey. "India's external sector continues to display resilience amid global headwinds of economic and trade policy uncertainties." End
US$1 = INR 86.61
Reported by Krity Ambey
Edited by Deepshikha Bhardwaj
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