23 APR,2019 | MEDC
India’s overall export have crossed the half a trillion dollar mark in the past half year. As per commerce and industry ministry data, they were helped primarily by higher shipments in engineering goods, pharmaceuticals, petroleum products, and chemicals. This growth in exports is all the more creditable as the WTO has cut the global trade forecast from 3% in 2018 to 2.6% in 2019. Imports increased 1.44% to $ 43.44 billion, leaving a trade deficit of $ 10.89 billion for the month compared to $ 13.51 billion a year earlier. India’s largest trade imbalance is with China and it is worth pointing out here that the bilateral trade deficit with that country has become part of a larger geostrategic dilemma for India. It is a broad reflection of the larger challenges emanating from competitiveness practices followed in both countries.
India needs to rein in its macroeconomic imbalances on one hand and to enhance industrial competitiveness on the other. In an election year, that is easier said than done. The US-China trade war did provide India a unique opportunity to again enter the world manufacturing stage, but we seem to be losing out to smaller competitors in the region like Vietnam, Indonesia, Bangladesh, Malaysia, and the Philippines. Until we are able to develop a competitive, diversified and sustainable industrial sector, we cannot benefit from the current global trade tensions. Astute policymaking (along with local industrial infrastructure development) should enable India to plug smoothly into global supply chains and use them as potential launching pads for enhancing its trade competitiveness.
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