India’s export woes (Mint)

Mains Paper 3: Economy
Prelims level: Not much
Mains level: India’s external trade deficits

Context

•  India’s October trade figures deepen concerns about the health of our export sector.
•  Released data says, the merchandise exports fell 1.1% from a year earlier to $26.4 billion last month. Though smaller than September’s 6.6% decline, it’s still bad news.
•  Exports have been stuck in negative territory for three months in a row.
•  A consolation was the sharp decline in the trade deficit to $11 billion in October from $18 billion a year earlier. This was on account of a 16.3% decline in imports, to $37.4 billion.

Recognised as a worrying picture:

•  Exporters have had to suffer inordinate delays in the refunds due to them under the goods and services tax regime.
•  Add to this India’s decision to walk out of the Regional Comprehensive Economic Partnership (RCEP), which will make access to a vast, rapidly-growing market difficult for them.
•  As for bilateral trade deals, our record so far has not been encouraging. Making matters worse are New Delhi’s trade differences with the US.
•  A settlement has proved elusive, even though policymakers on both sides aver that significant progress has been made on contentious issues.

Way ahead:

•  If India is to revive its flagging export sector, it will have to reshape its policy mix in various ways. Local manufacturers need to be competitive globally.
•  The recent reduction in corporate tax is a good move on the financial front, but past experience suggests that exposure to foreign competition is especially vital—which requires lowering import tariffs, not raising them.
•  Then there are many other drags on business that need elimination.

Conclusion:

•  Unless export-oriented reforms are undertaken, India risks missing the opportunity to grab some of the global value chains disrupted by the US-China trade war.
•  That would be one costly miss.

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Prelims Questions:

Q1. With reference to the Shaala Darpan portal, consider the following statements:
1. It is an end to end E-Governance school automation and management system for Navodaya Vidyalaya Samiti (NVS).
2. It was recently launched by Ministry of Information and Broadcasting.

Which of the statements given above is/are correct?
A. 1 only
B. 2 only
C. Both 1 and 2
D. Neither 1 nor 2

Answer: A
Mains Questions:
Q1. What are the factors behind India’s export sector woes? What are the steps needed to revive the sector?