‘Indifferent export performance is straining BOP’

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Biswajit Dhar, noted economist and former professor, JNU, shares his analysis of the NDA’s external trade performance in the last ten years. How would you rate NDA’s performance on a scale of 1 to 5?My score would be 2.5, which is 50 per cent. There has been a lack of policy focus on how to engage with the global economy. While the process of global integration continues India is seen as somewhat of a laggard, a country not enthusiastic about integrating with the global economy. But after Covid, we have seen more proactive approach towards trade integration. What has been the game changer, if any, in the last 10 years for external trade?The NDA government came to office with an agenda to reverse the pro-FTA stance of its predecessor government. The present government argued that the three major FTAs concluded with East Asian partners, viz. ASEAN, Republic of Korea, and Japan, must be reviewed and made more “India-friendly”. The culmination of this phase of intense skepticism regarding bilateral agreements was India’s walking away from the RCEP negotiations. However from the end of 2021, the government did a complete U-turn by announcing that it was negotiating as many as right FTAs. One of these agreements, with the UAE has been finalised, as has been a lighter version of the agreement with Australia. Recently, the agreement with EFTA was concluded. Incidentally, this was not among the 8 FTAs which were being negotiated in 2021. What is the unfinished agenda?India needs to increase its presence in the global economy, especially in merchandise goods. Indifferent performance of exports has been straining the balance of payments, and this situation needs to be reversed. Increasing competitiveness of Indian industry must be the topmost priority, as should be the efforts to lower trade costs. Trade related infrastructure, particularly those of the major ports, must be improved to provide competitive edge to Indian exports.SHARE
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