India has the potential to reach the goal of $1 trillion in merchandise exports one year earlier than its target of 2029-30 if it records an 18 per cent annual growth rate in exports, a recent report by PwC India said. It added that this would require “global, political and economic stability.”
“As this scenario envisages a favourable environment, India could reach its target in four years (2028-29),” the report titled “VIKSIT: An Approach for India to Achieve $1 trillion exports” said, calling the 18 per cent growth rate “optimistic.”
The report said that in the current scenario, the export growth rate can be assumed to be 14.45 per cent, taking into consideration supply chain disruptions arising from the Russia-Ukraine conflict, high inflation, and growth stagnation in key economies such as the US, Germany, Japan, and the United Kingdom.
In this case, the export target can be reached by “early 2030.”
In the “Conservative” case, if exports grow at the rate of 10 per cent, India would have to wait until 2032-33 to meet the target of $1 trillion in exports.
The report also highlighted that after the Covid-19 pandemic, the role of Micro, Small, and Medium Enterprises (MSMEs) in Indian exports has increased. However, there is a gap in export growth and MSME “internationalisation.”
“Currently, just 1.36 per cent of India’s registered MSMEs are exporting, revealing a gap between export growth and MSME internationalisation. Challenges such as the business environment, export procedures, finance access, and market information hinder MSME exports,” said Sanjeev Krishan, chairperson at PwC India, adding that these need to be addressed as part of the journey.
The report also noted that six “VIKSIT” pillars can help in creating more opportunities for Indian exports.
Here, V stands for value addition and volume growth in exports by identifying priority products and industries, I for infrastructure investments, K for knowledge sharing and capacity building, S for sustainable supply chains, I for inclusive industrialisation focused on MSMEs, and T for technology enablement.
Moreover, the report added that the Centre and states need to mobilise private sector investments towards export-oriented businesses from emerging sectors as well as uplift MSME performance in exports.
First Published: Aug 09 2024 | 6:55 PM IST
