The challenges that India’s exports face from rising protectionism in form of tariffs and other barriers can be turned into an opportunity by adapting to the emerging trends and leveraging strengths, according to the economic survey.
A big chunk of India’s exports to its key markets like the UK and European Union (EU) is highly susceptible to climate change related measures that could impact important export sectors like chemicals, machinery, textiles and electronics.
“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,” the survey presented in Parliament said.
The climate-related trade restrictions like Carbon Border Adjustment Mechanism (CBAM) and EU Deforestation Regulation (EUDR) present a formidable challenge to India.
“The evolving trade stance of a few major economies could affect key Indian export sectors such as chemicals, machinery, textiles, and electronics. In the short term, diversifying export markets is essential, while medium-term efforts should focus on increasing market share,” the survey said.
The shift from globalisation to rising trade protectionism accompanied by increased uncertainty calls for a new strategic trade roadmap for India. To remain competitive and enhance its participation in global supply chains, India must continue reducing trade costs and improving facilitation to boost export competitiveness while the industry must continue to invest in quality.
While the world tariffs and other barriers go up,the survey has suggested their use by India to aid its industrialisation and attract foreign investment. Tariffs can aid the goals of industrial policy and help in the development of desirable sectors in the economy, the survey said citing examples of the industrialised countries in Asia and the West. Non Tariff Measures (NTM) can indirectly affect FDI through their impact on imports by encouraging FDI to the country that imposes them, as these measures raise barriers to market access,” the survey added.
» Read More
