The highest export in the second quarter was recorded in July (US$35.17 billion). In the month of September, exports amounted to US$ 33.40 billion and by the end of September, export to India reached a new fleet & passed the US$100 billion mark. The government is on track to reach US$ 400 billion; Indian exports totaled US$ 197 billion during the first six months of the current fiscal year. Even though India has reached an order of magnitude in terms of exports, the real potential that India can achieve in terms of exports is still closed, but it can be unlocked if India seeks to improve where it has lagged for centuries.
• Project execution must be faster: Indian exporters must realize that the export business is a competitive world that requires serious skills when it comes to meeting the schedules/timelines of any particular export project. Due to the increasing confidence of foreign buyers in Indian products, the problem is not that foreign buyers do not come to India. Indian exporters need to seriously shift their approach from attracting foreign buyers to making them stay in India by building healthy long-term relationships and providing them with excellent project execution.
• Dispute resolution is a big problem: India must recognize that as exports increase, the number of disputes will increase, Indian exporters and even foreign buyers may have trouble with disputes, so India needs a Dispute settlement system that will not only help Indian Exporters, but also help foreign importers, which will increase their confidence in India and they can give preference to do business in India.
• Well-designed incentive systems: India has many incentive systems to promote export, some of which are MEIS (Merchandise Export Incentive Scheme), Remission of Duties and Taxes on Exported Products (RoDTEP) and several others, such as the sector textile specific discount of State and Central Taxes and Levies (RoSCTL), but these incentive scheme must be well designed and updated regularly, the Foreign Trade Policy (2015 - 20) has not yet been updated and has been postponed more than twice until March of 2022. Indian exporters have expectations from the new foreign trade policy; the Indian government must understand their expectations and develop a policy that benefits exporters in all sectors.
• Contract improvements and protection against abusive contract termination: A long-term relationship with a foreign buyer is based on contracts. Indian exporters must take appropriate measures to ensure their protection against undue termination of the contract, make sure that there are penalties for abusive contract termination.
• Simplification of the export process for small value shipments: Many people buy local saris, costumes, handicrafts, finished / cooked goods and ask stores to send a courier service to friends and family abroad. For such low value exports, we need to simplify and integrate compliance with customs, GST, DGFT and other relevant authorities. Programs such as the conversion of districts into export centers would benefit from this simplification.
Speaking to officials and exporters on August 6, Prime Minister Shri Narendra Modi said that one of Atmanirbhar Bharat's goals was to increase the share of Indian exports in global value chains. He also added that one of the goals of Atmanirbhar Bharat is to increase the share of India's export in the GVCs.
Global value chain is companies taking advantages of globalization by using technological and cost efficiencies of different countries to produce different parts of a final product, depending on where it can be done most efficiently. In past the production of a single product was being done in one country where all the raw material was brought to one factory, where it would go through different processes on the production line to become a final product.
Global Value chain also called as Slicing the Value chain, is possible due to the advancement of transport and communication, for example different part of a Boeing aircraft are created in different parts of the world depending on where each part can be produced most efficiently using the technological advantages of the suppliers. In past a lead firm or large company in this case Boeing would hesitate to produce different parts indifferent countries, but now they are unwilling to own every part of the production process and are eager to take the advantage of globalization and much more likely to make partnership and build network and relationships across the globe through contracts, knowledge sharing and forming a network of suppliers with strong technological competence worldwide.
Chocolates made in Belgium use hazelnuts from Turkey, palm oil from Malaysia, cocoa from Ghana, sugar from Europe, and vanilla from the US. Getting access to a global value chain is only possible on grounds that small business export and take experience in the foreign markets which will help them get recognition and if the quality of their product impresses the world big business will contact them to be a part of their global value chain.
Indian government is also taking efforts to make India an export hub, the Chamber of Industrial and Commercial Undertakings (CICU) in association with Department of Industries and Commerce organized an event on export promotion, ‘Vanijya Utsav”, to showcase India as a rising economic force under Azadi Ka Amrut Mahotsav. In this event, presentations were made and lectures were delivered to encourage exports. The event was attended by more than 150 members and an exhibition was organized during which exporters showcase their products.