FIEO also said that while meeting the ambitious target of $2 trillion exports by 2030, requiring a CAGR of 12.7%, is challenging, it is within reach and can be achieved. Demand, it stated, is slowly improving and continues to be robust for technology driven sectors such as electronics, machinery, high and medium technology, pharmaceuticals, medical and diagnostic equipment.
Expressing concern over the growth of the labour-intensive sectors, FIEO President Ashwini Kumar said we lost the market to competitors in categories like knitted and woven garments, made-ups, footwear, gem and jewellery. “In the knitted garment sectors, for example, India added $200 million to its exports during calendar years 2019-2022, whereas, Bangladesh added $10 billion in the same period. In the footwear sector, while global imports grew at a CAGR of 5%, our exports contracted. Bangladesh exports grew by $750 million in the same period. We need to look into global demand and accordingly modify our manufacturing,” he said at a media interaction in the capital.
Kumar, Partner at Victor Forgings, Jalandhar, was unanimously elected president of FIEO on March 11, said a release.
FIEO expects exports in services to reach approximately $390-$400 billion in the current fiscal year on the back of business services such as engineering, R&D, advertising, business and management consultancy. “Tourism, including medical tourism, is expected to grow as the e-visa facility has been extended to over 170 countries and the country has been marketed well. Generative AI and spatial computing has opened up new opportunities for software exports,” he stated.
Talking about the scope of the technology-driven sectors of exports such as machinery, electrical and electronic, automobile, pharma and biotechnology, Kumar said that these would get a further boost with production-linked incentives. “India’s exports in these sectors recorded a CAGR of about 20%, predominantly propelled by mobile phone exports. In the past 4 years, our exports growth in all the above sectors, outpaced global import growth and, thus, our share, though modest, has improved,” he said. Delving further on the share of export credit in net bank credit as extremely low and not commensurate with the share of India’s exports in the GDP, Kumar stated that the demand for credit has gone up with rising inflation, high commodity prices and abnormal increase in sea as well as air freight. “With longer voyage time, on account of diversion of cargo through the Cape of Good Hope, coupled with slow offtake from the shelves, buyers are also taking longer time to remit export proceeds, necessitating higher credit for a longer period. This requires additional flow at most competitive rates,” he said. The industry body has proposed to create an Export Development Fund (EDF) to assist Indian MSME, exporters, export promotion councils and commodity boards and trade promotion organisations to undertake export promotional activities. “Indian MSMEs lack marketing exposure and the current schemes to support the same have grossly inadequate budgets. FIEO puts focus on aggressive marketing for visibility of our exquisite products and services,” he added.
