EXIM Landscape
Navigating India's Export Ecosystem: Insights from 2022-23
The total figure for exports by India for the period FY 2022 – 23 stood at USD 776.3 billion, which is the highest to date. This figure includes both goods or merchandise and services. The figure for merchandise stood at USD 451 billion while services contributed USD 325.3 billion. The total figure represented a growth of 6 per cent over the last year.
Let us now read about the prevalent business environment in the context of exports. You will come to know about the country’s infrastructure with respect to exports, the kind of governmental support provided to exporters and the level of innovation based on research and development.
In FY 2022-23 India’s exports ranked fifteenth in the world, up from eighteenth in FY 2021-22 and twenty-first in the previous year.
In India, exports have had a significant contribution to the Gross Domestic Product (GDP), which is the standard measure for calculation of the value added that has been created through the goods and services produced in a country for a defined period, usually a financial year.
You will now see RBI figures for the contribution of exports to the GDP of India starting from FY 2016-17 to FY 2022 – 23.
| Year | Exports as a percentage of GDP |
|---|---|
| 2016 – 2017 | 19.2 |
| 2017 – 2018 | 18.8 |
| 2018 – 2019 | 19.9 |
| 2019 – 2020 | 18.7 |
| 2020 – 2021 | 18.7 |
| 2021 – 2022 | 21.5 |
| 2022 – 2023 | 22.8 |
From the figures above you can see how vital exports are from the point of view of the economy of the country and why the governments try to improve the infrastructure and facilities for export and form policies and regulations aimed at a steady growth in exports.
India exports several types of merchandise and services.
India’s key exports in the form of goods are from the following sectors:
- Jewellery and Diamonds
- Automobiles
- Machinery – Construction equipment, Agricultural Machinery, Industrial Machinery, Textile Machinery
- Bio-Chemicals
- Drugs and Pharmaceuticals
- Cereals – Rice, Wheat, Maize and Millet
- Iron and Steel
- Textiles
- Electronic Goods – Computers and Smartphones.
- Refined Petroleum Products, Naphtha and Liquified Petroleum Gas (LPG)
India’s good exports amounted to $436bn for the year FY 2022-23. India’s services exports amounted to $325bn for the year FY 2022-23.
India’s key exports in the form of services are as below:
- Information Technology and Business Process Management (IT-BPM)
- Travel
- Transportation
- Insurance
- Business Services
- Financial Services
- Communication
The services exports continue to be led by the IT-ITES sectors with the USA, UK and the countries in the European Union (EU) leading the field with contributions of sixty-two per cent, seventeen percent and eleven per cent respectively.
The top ten countries by share of exports by value for India for FY 2022 – 23 are as below.
| Country Name | Share of exports by value in percentage |
|---|---|
| United States of America (USA) | 18.05 |
| United Arab Emirates (UAE) | 6.65 |
| China | 5.04 |
| Bangladesh | 3.83 |
| Netherlands | 2.97 |
| Singapore | 2.64 |
| Hong Kong | 2.6 |
| United Kingdom (UK) | 2.49 |
| Belgium | 2.39 |
| Germany | 2.34 |
India has exported a total of USD 118.8 billion in the form of goods and services to the United States of America in FY 2022 – 23.
India has developed a robust infrastructure to support exports. The country has been increasing international airports, developing ports and developing railway and road networks to facilitate the movement of goods from the exporter to the point of departure of the goods.
Major ports whose administration is controlled by the Ministry of Shipping, Government of India are listed below.
- Chennai Port
- Cochin Port
- Deendayal Port, Kandla
- Jawaharlal Nehru Port, Navi Mumbai
- Paradip Port
- Syama Prasad Mookerjee Port, Kolkata
- Mormugao Port
- Mumbai Port
- New Mangalore Port
- Visakhapatnam Port
- V.O. Chidambaranar Port, Thoothukudi Apart from these ports, there are two hundred minor ports too.
In addition to the government-owned and operated ports, there are the following private ports in India:
- Dakshin Bharat Gateway Terminal, Tuticorin
- Chennai Container Terminal
- Gateway Terminals India, Mumbai
- Ennore Tank Terminals
- Gujarat Pipavav Port
- India Gateway Terminal, Cochin
- Mundra International Container Terminal
- Nhava Sheva International Container Terminal
- Visakha Container Terminal
- Paradip International Container Terminal
- Kandla International Container Terminal
- Mangalore Coal Terminal
- JSW Dharamtar Port
- JSW Jaigarh Port
- JSW Mangalore Container Terminal
- JSW Paradip Terminal
- Paradip East Quay Container Terminal
- Ennore Coal Terminal In order to help exporters, India has reinstated its open sky policy with respect to air cargo. This means that apart from Indian carriers and scheduled foreign carriers, foreign airlines are allowed to operate non-scheduled flights for cargo for the next three years from all 137 airports in India.
Dedicated Freight Corridors have been announced for the Western and Eastern Corridors by the Minister of Railways while presenting the Railway Budget for the year FY 2005 – 06. This railway corridor is the Indian Railway’s equivalent of the Golden Quadrilateral, linking the four metropolises – New Delhi, Kolkata, Chennai and Mumbai and also the diagonals – Mumbai with Kolkata and New Delhi with Chennai.
Read on to learn of the salient features of the Dedicated Freight Corridor:
- Covers a distance of 3381 Kms passing through 9 states
- Level Crossings are completely eliminated on this corridor
- 596 major bridges and 4643 minor bridges to be built
- 52 rail flyovers, 304 Road Over Bridges and 557 Road Under Bridges to be constructed You can quite imagine the seriousness of the government in rapidly moving freight across the country in an uninterrupted manner and how useful this will be for exporters.
The government has also built and is in the process of building high-speed expressways to further expedite the transportation of goods by roads. All this helps the exporters.
Indian Customs authorities have taken several steps to improve the ease of doing business. The ones benefiting exporters are as follows:
- Adaptation of Digital Signature
- The Courier Imports and Exports (Clearance) Amendment Regulations, 2016
- National Committee on Trade Facilitation (NCTF)
- Single Window Interface for Facilitation of Trade for Export too
- Express Cargo Clearance System (ECCS) at Courier Terminal, Sahar, Mumbai
The Government of India has taken the following initiatives for promotion of export:
- Launching of New Foreign Trade Policy on 31st March 2023
- Extension of Interest Equalisation Scheme with regard to rupee export credit both pre and post-shipment
- Trade Infrastructure for Export Scheme (TIES) and Market Access Initiatives (MAI) Schemes
- Rebate provided on Central and State taxes and levies for the export sector which is labour-oriented
- Scheme for the remission of taxes and duties on exported products
- Common Digital Platform launched for Certificate of Origin to facilitate trade and help exporters take advantage of Free Trade Agreement (FTA)
- Districts have been identified as export hubs based on the potential of products for export, removing obstacles to the export of the same supporting local exporters and helping generate employment
- Indian Missions abroad to play an active role in the promotion of trade
- Regular and proper monitoring of export performance and track deviations
As you can see, the Government of India is doing a fair job in the promotion of exports. However certain factors do act as challenges for export today:
- The Russian invasion of Ukraine has added global uncertainty and governments have shifted their expenditure patterns
- The Red Sea crisis is potentially dangerous for Indian exports to the USA and the EU as 80% of goods in the merchandise trade between India and the EU move through the Red Sea
- Protectionist measures by the USA and EU countries may impact Indian exports
- A tighter monetary policy with an overall weaker outlook may hamper exports
You have seen the close relationship between the export performance of India and the GDP. India has been doing well in exports and has been successful in riding out the COVID–19 crisis. The Indian government has a very positive outlook on exports. According to the Minister of Commerce and Industry, Consumer Affairs, Food and Public Distribution and Textiles, Government of India, Shri Piyush Goyal, India is expected to reach the ambitious figure of USD 2 trillion in exports by 2030.
