“”Trade Winds of Change: How Indian Exports Can Sail East and West for Success””
Introduction
India’s export strategy needs to look beyond traditional Western markets and consider the booming Asia Pacific (APAC) region. Despite a decline in goods exports, it is essential to tap into the potential of APAC. This article explores the challenges faced by India’s exports to APAC and suggests ways to unlock opportunities in this lucrative market. This brief you the “Trade Winds of Change: How Indian Exports Can speed East and West for Success”
Declining Exports in the APAC Region
India’s goods exports from April to July have decreased by 14.5%, with the APAC region experiencing the most significant decline of 22.0%. In comparison, exports to the US and European Union (EU) declined by 11.5% and 4.8% respectively.
Historical Context and Shrinking Market Share
This decline in exports to APAC is not a recent development. India’s share of goods exports to the region has been shrinking since 2008. In fiscal year 2018-19, APAC accounted for 33% of India’s goods exports, surpassing the combined share of the US and EU at 30.4%. However, APAC’s share decreased to 26.6% by fiscal year 2022-23 while the US and EU’s share increased to 34%. During April-July in the current fiscal year, APAC’s share further diminished to 26.1%.
Trade Deficit and Import Challenges
India’s export challenges are compounded by the strength of imports from APAC, widening the trade deficit with the region. The trade deficit increased from 49.6% in 2018-19 to 64.7% during April-July this fiscal year. Although China remains the primary contributor to the trade deficit, the deficit with other APAC countries is also growing.
Mega Trade Deals and Mitigating Risks
India’s absence from major trade agreements, such as the Regional Comprehensive Economic Partnership (RCEP), Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), and Indo-Pacific Economic Framework for Prosperity (IPEF), may hinder its export potential. By not joining these agreements, India faces potential barriers as tariffs decrease and member countries strengthen synergies. However, India’s existing 13 free trade agreements (FTAs) and six preferential trade agreements (PTAs) mitigate some risks associated with not joining these mega trade deals.”Trade Winds of Change: How Indian Exports Can speed East and West for Success”
Unlocking the APAC Market – A Prime Opportunity
Amidst these challenges, it is crucial for India to maintain focus on the APAC region while actively engaging with Western markets. The APAC market, with a nominal GDP of approximately $32 trillion in 2022, surpasses the US ($25.5 trillion) and Eurozone ($14.1 trillion). “Trade Winds of Change: How Indian Exports Can Sail East and West for Success” S&P Global predicts that APAC’s (excluding India) growth will exceed that of the US and Eurozone. Leveraging its geographical proximity, India must explore strategies to unlock the full potential of the APAC region for its exports.
Conclusion
In the pursuit of export growth, India cannot neglect the vast opportunities presented by the APAC region. By actively engaging with both the East and the West, India can tap into the potential of the APAC market while maintaining a strong presence in Western markets. It is crucial to strike a balance and capitalize on the opportunities in both regions to unlock India’s export potential.
With the changing times, it is essential to re-examine India’s export strategy. India needs to focus more on emerging markets like the APAC region, while continuing to engage with Western markets. “Trade Winds of Change: How Indian Exports Can Sail East and West for Success” the APAC region offers enormous potential with its massive nominal GDP, and India must think of innovative ways to harness this potential for its exports.
Joining mega trade deals can mitigate the risks of potential barriers, but India’s existing PTAs and FTAs have been effective in circumventing these risks. Rudyard Kipling said that the East is East and West is West, and the twain shall never meet, but with a balanced focus on both East and West, Indian exports can indeed realize their full potential.
Disclaimer:
The information provided in this article is based on the latest Acts, Rules, Circulars, Notifications, Provisions, Press Releases, and other applicable material available at the time of compilation. We have diligently ensured the completeness and accuracy of the material. However, it is essential for users to consult the relevant legislation for specific guidance. Please note that the data provided may be subject to change without prior notice and should not be considered as professional advice. Estabizz Fintech holds no liability for any outcomes resulting from the use of this material.
