The evolving trade stance of a few major economies could affect India's exports in key sectors such as chemicals, machinery, textiles, and electronics, according to the Economic Survey for 2024-25.
"In the short term, diversifying export markets is essential, while medium-term efforts should focus on increasing market share. Over the long term, India must position itself as a strategic partner in high-value sectors like biotechnology and semiconductors," the Survey said.
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The Survey added that over the long term, India must position itself as a strategic partner in high-value sectors like biotechnology and semiconductors. Strategic technology partnerships provide opportunities for enhanced cooperation in key areas like space, semiconductors, quantum technologies and advanced telecommunications.
It acknowledged that while merchandise imports have outpaced its exports counterpart leading to widening India’s goods trade gap, the surplus in services trade lent balance to the overall deficit.
India's total exports (merchandise and services) rose 6 percent on-year to $602.6 billion in the first nine months of FY25.
The Survey batted for continued focus on scouting new markets for Indian goods in a bid to boost exports despite global geopolitical challenges.
"...the exploration of new markets signifies a proactive approach to expanding its export reach and reducing dependency on any single market or region. This diversification strategy mitigates risks associated with market fluctuations and positions India as a more competitive player in the international trade landscape while contributing to the country's economic development," it said.
Nageswaran's Survey also pointed out that restrictive trade policies such as the European Union's Carbon Border Adjustment Mechanism (CBAM) too have the potential to restrict India’s exports and widen the current account deficit at a time when net foreign direct investments into the South Asian nation is declining.
The chief economic adviser said that going ahead a further rise in trade-restrictive measures could lead to higher costs, deter investment, and slow global economic growth.
The Survey's concern around India's exports comes at a time when US President Donald Trump has announced an America-first trade policy. While he is yet to formally roll-out higher duties on specific countries, during his campaign the business-tycoon turned politician had threatened steeper tariffs on Canada, Mexico, China and the BRICS grouping, which includes India.
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