Rise in exports – A Boost to Trade Scenario
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TOPIC: General Studies 2 & 3:
- Indian Economy
- Effect of policies and politics of developed and developing countries on India’s interests
- Effects of liberalization on the economy
- Changes in industrial policy and their effects on industrial growth
- A marginal 2.44% increase in exports as well as lower imports of gold and petroleum products in February, significantly narrowed the country’s trade deficit to $9.6 billion, according to data released by the Commerce Ministry on Friday.
- March exports are at least $5 billion higher than the general trend of $26-27 billion monthly exports in the other months, with the traditional sectors of pharma, electronics, petroleum and chemicals driving the increase.
- India’s exports hit a new high of $331 billion in the last financial year
- This was despite the country witnessing single-digit growth
- The growth in March was the fastest increase in five months
- As per the data, the drop in imports was mainly on account of sharp decline in inward shipments of gold and petroleum products.
The Way Forward:
Global growth, projected by the IMF, is expected to shrink to 3.3 per cent in 2019, against 4 per cent in 2017 and 3.6 per cent in 2018. Faced with headwinds from Brexit, macroeconomic stress in Argentina, Turkey and Italy, and the US-China wrangle, monetary authorities in the EU, China, US and Japan have adopted an accommodative stance. While this could revive the global economy, the challenge for India is to secure its GDP growth amidst such readjustments.
- Reforms to ease logistical constraints to exports should continue, rather than merely pursuing a sort of ‘race to the bottom’.
- India must move up from low-productivity sectors by improving the quality of its human capital.
- There is a need to further focus on new products like food commodity so that the growth is more resilient and sustainable. Also, it will cushion our exports from the global volatility and shocks in the long run.
Connecting the Dots:
- In an era where connectivity between men has increased, why do you think countries are opting for more protectionist policies rather than being more global? What impact can it have on India?
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