With most factories out of restrictions amid the second wave of the pandemic, production is no longer at a standstill as seen during the first wave.
With most factories out of restrictions amid the second wave of the pandemic, production is no longer at a standstill as seen during the first wave. Therefore, now the expectations of an increase in the graph of manufacturing and exports have strengthened. In the budget for the financial year 2022-23 to be presented on February 1, there are signs of giving new impetus to foreign trade and exports. These can prove to be important steps for the development of the economy.
It is noteworthy that on 23 December, the Federation of Export Organizations (FIEO) had said that India’s foreign trade and exports have increased rapidly due to the opening of various economies of the world from the beginning of the current financial year 2021-22. In the nine months from April to December 2021, about 300 billion dollars worth of goods were exported from India and the record export target of 400 billion dollars is likely to be achieved in the current financial year. During the year 2020-21, India exported goods worth about $ 290.63 billion.
There are three scenarios emerging for the country’s foreign trade boom in the year 2022. One, last month India and Russia set a target of taking bilateral trade to a height of 30 billion dollars and mutual investment to 50 billion dollars by 2025. The second scenario is that after the Indo-US trade deal on November 23 last year, the trade between the two countries could cross $100 billion this time. Thirdly, India’s foreign trade with developed and developing countries has reached a record high in the year 2021 amid the challenges of Kovid-19.
It is worth noting that in the summit meeting with Russia in December last year, India said that we are adopting a long-term vision to take forward our relations in the economic field. Due to this, the foreign trade between India and Russia will increase rapidly in the coming years. Cooperation will be further strengthened through development and co-production in key areas under the ‘Make in India’ programme. It is also worth noting that in the first nine months of the year 2021 between India and Russia, an increase of thirty-eight percent has been registered in the bilateral trade.
In the year 2020, the bilateral trade of India and Russia stood at about $ 9 billion. After this summit meeting of India and Russia, now with Russia are food, agriculture, energy, civil aviation, infrastructure, transport, information technology, space, digital technology, health, pharmaceutical manufacturing, biotechnology, supplies, medicine, minerals and paper. Various projects in the year 2022 in areas like industry and strong potential for increasing foreign trade will go ahead.
With the increase in India’s trade with the US and the growing business of taking IT services, a new era of business relations between the two countries is expected to start. The trade agreement signed between the two countries under the India-US Trade Policy Forum (TPF) on November 23 last year has completely opened up the US market for exporters of agricultural producers from India. While many products including pomegranates and grapes from India will now be able to be shipped seamlessly to the US markets, the US will be able to easily ship many of its products, including cherries and pork, to the Indian market.
Significantly, America is India’s largest trading partner, as well as the largest export market for India. According to the Ministry of Commerce, bilateral trade between India and the US stood at $ 88.75 billion in 2019-20. Due to the Corona disaster in the last financial year 2020-21, it was around $ 80 billion. With the new trade deal with the US, bilateral trade can cross the hundred billion dollar mark in the current year 2021-22.
In view of the record foodgrain production and production of fruits and vegetables in India in the current financial year, the possibilities of their export have also increased. Agricultural exports can be made in sufficient quantities to meet the demands of agricultural and food processed products to the US and Russia as well as to various countries. In such a situation, in the current financial year 2021-22, agricultural exports can cross the level of forty three billion dollars.
It is also worth mentioning here that after effective talks with various heads of state during the Group-20 countries summit last year, India has limited scope with countries like EU, USA, South Africa, Australia, UAE and UK etc. Moving fast to Free Trade Agreements (FTAs) may materialize some such trade agreements in the new year 2022. These are the countries that need a big market like India and these countries in turn are eager to open their markets for India’s specialty products.
There are many other reasons for the expectation of increased foreign trade and export boom in the year 2022. Amidst the second wave of the pandemic, most factories, keeping factories out of restrictions, did not lead to production stagnation as it was seen during the first wave. Therefore, now the expectations of an increase in the graph of manufacturing and exports have strengthened. In the year 2021, production related concessions i.e. PLI schemes in many important sectors have promoted production instead of raw materials for the first time. The definition of micro, small and medium (MSME) industries has been reformed so that many medium sized units also get the benefit of MSME. These steps will help in increasing foreign trade and exports.
But with the prospects of increasing the country’s foreign trade in the year 2022, many challenges need to be addressed. Strategic efforts will be needed to protect the industry and business from the challenges of corona infection and Omicron. The campaign for vaccination and additional doses of Kovid vaccine will have to be intensified to prevent the epidemic. It should be the effort of both the government and the public that in the year 2022, the situation of any kind of complete ban or restrictions should not be allowed to happen.
Apart from this, special efforts will have to be made to control imports from China and increase exports to China. At the same time, apart from the traditional western markets, the government will now have to launch a special campaign to increase foreign trade in more than 150 countries where India has been shown as a helpful country during the Corona period. New export prospects have to be seen in ASEAN countries and Latin American countries. Exporters will have to be benefitted from more incentives. It would be beneficial to make available credit for exports at low interest rates.
It should be expected that the steps that India has taken to increase trade with the two economic superpowers of the world, America and Russia, will increase trade with these two countries rapidly in the coming years. Also, such provisions will be made in the budget and concessions will be given which will increase trade with developed and developing countries. With the increase in foreign trade and exports, new employment opportunities will also be created in the country and the economy of the country will also grow rapidly.