Chapter-4 : EXTERNAL SECTOR: STABILITY AMID PLENTY

Economy Survey 2023-2024 : Revision Notes

INTRODUCTION

Global Economic Challenges

• Global economy faced shocks due to COVID-19, Russia-Ukraine conflict, Middle East developments.
• High inflation in many countries.
• Elections in 49% of world population in 2024 adding to policy uncertainty.
• Slowdown in foreign investments due to uncertainties, higher interest rates, and active industrial policies in developed countries.
• Global FDI decreased by 2% in 2023 to USD 1.3 trillion.
• Global trade declined by 5% in 2023.
• Emerging Market and Developing Economies (EMDEs) external debt increased from 26.2% to 29.8% of GDP in 2012-2023.
• AEs current account surplus in 2023 after deficit in 2022.
• EMDEs current account surplus moderated from 1.5% to 0.6% of GDP in 2022-2023.

CHANGING GLOBAL TRADE DYNAMICS

Global Trade Dynamics

• Trade is crucial for investment, job creation, and economic growth.
• Global trade patterns changing: Mexico largest US trade partner, surpassing China and Canada.  
• Vietnam’s trade with China and US increased significantly.
• EU shifting energy imports from Russia to Norway and US.  
• Emergence of decoupling, derisking, reshoring, nearshoring, and friend sharing trends.
• Global trade growth slowed after financial crisis but may be a natural development.  
• De-globalization trends heterogeneous across countries.
• US remains reliant on Chinese inputs despite policies.  
• Global trade volume contracted by 1.2% in 2023 after 3% expansion in 2022.  
• Value of world merchandise trade fell by 5% in 2023, offset by 9% increase in commercial services.  
• Global exports of digitally delivered services rose by 9% to USD 4.3 trillion in 2023.

Trade Outlook

• Global trade expected to improve in 2024 and 2025.  
• World merchandise trade volume expected to grow by 2.6% and 3.3% in 2024 and 2025.  
• Positive global trade trends in first quarter of 2024.  
• Geopolitical tensions and policy uncertainty could limit trade rebound.  
• Food and energy prices could spike due to geopolitical events and climate disturbances.  
• Restrictive trade practices leading to higher prices.

Shipping Route Disruptions

• Panama Canal operating at partial capacity due to freshwater shortages.
• Suez Canal handles 12% of global trade and one-third of container shipping between Asia and Europe.  
• Traffic diversion increasing shipping time and costs.
• Container shipping rates rising.  
• Suez Canal Authority increasing transit fees.  

India’s Trade Position

• India expected to benefit from strong trade relations with various countries.  

INDIA’S TRADE: RESILIENCE AMIDST GLOBAL TURMOIL

1.India’s Overall trade

India’s Trade Performance

• Trade contributed to India’s economic growth.
• Trade openness indicator increased from 37.5 in FY05 to 45.9 in FY24.
• Share of trade (excluding petroleum) in GDP rose from 32.3% in FY05 to 40.8% in FY23.
• India’s trade catching up with global levels.
• India’s share in global goods exports increased to 1.8% in FY24 from 1.7% in FY16-FY20.
• Share in global services exports rose to 4.3% in FY23 from 3.3% in FY16-FY20.

India’s Overall Trade

• Overall exports grew since FY17 but slowed in FY20 due to pandemic.
• Significant turnaround in FY22.
• Overall exports crossed USD 776 billion in FY23.
• Overall imports increased to USD 898 billion in FY23.
• Overall exports surpassed FY23 record by 0.23% in FY24.
• Overall imports declined by 4.9% in FY24 despite robust domestic demand.
• Overall exports increased to USD 133.6 billion in first two months of FY25.
• Overall imports increased to USD 149.9 billion in first two months of FY25.
• Overall trade deficit widened from USD 14 billion to USD 16.3 billion in first two months of FY25.

 

2.Merchandise Trade: Enduring the global headwinds

Merchandise Exports

• Merchandise exports contracted in H2 FY23 and H1 FY24 due to geopolitical tensions.
• Trend reversal in H2 FY24 with positive export growth.
• Decline in merchandise exports in FY24 due to slowdown in major exporting partners and lagged impact of monetary tightening.
• Merchandise imports declined in FY24 due to fall in global commodity prices.
• Merchandise trade deficit narrowed to USD 238.3 billion in FY24 from USD 264.9 billion in FY23.
• Non-petroleum and non-gems and jewellery exports grew by 1.5% in FY24.
• Non-petroleum, non-gems and jewellery imports contracted by 3.5% in FY24.

Export Trends

• Merchandise exports rose to USD 73.1 billion in April-May 2024 from USD 69.6 billion in previous year.
• Share of capital goods in merchandise exports increased from 16.3% in FY23 to 18.9% in FY24.
• Share of consumer goods in merchandise exports declined from 48.9% to 47.5% in FY24.
• Share of intermediate goods declined from 30.2% to 28.4% in FY24.

Export Destinations

• India adding more export destinations, diversifying exports.
• Share of top 10 countries in merchandise exports declined from 61.9% in FY2000 to 50.5% in FY24.
• Regional Herfindahl Index declined from 0.071 in FY2000 to 0.046 in FY24.
• Asian, African, and Middle Eastern nations emerging as export destinations.
• UAE, Singapore, China, Russia, and Australia major export partners in FY24.

Product Specific Success Stories

Toys

• India transformed from net importer to surplus nation in toy trade.
• Toy exports registered CAGR of 15.9% between FY13 and FY24.
• India’s import bill for toys from China dropped from USD 214 million in FY13 to USD 41.6 million in FY24.
• Government initiatives: National Action Plan for Toys, increased basic customs duty, sample testing of imports, Quality Control Order, cluster-based approach.

Defence Exports

• Defence production grew from ₹74,054 crore in FY17 to ₹108,684 crore in FY23.
• India transitioned from arms importer to top 25 arms exporter.
• Export authorisations increased from 1,414 in FY23 to 1,507 in FY24.
• Government initiatives: simplified export procedures, Aatmanirbhar Bharat.

Footwear Exports

• India is second-largest global footwear producer and ninth-largest exporter.
• Footwear exports increased from USD 1.9 billion in FY21 to USD 2.5 billion in FY24.
• Government initiatives: Quality Control Orders, testing facilities, Indian Footwear and Leather Development Programme.
• Indian footwear market expected to reach USD 90 billion by 2030.

Smartphone Exports

• India’s domestic production and exports of smartphones increased steadily.
• FY20 marked first time domestic production exceeded domestic demand.
• Smartphones became one of India’s top export categories.
• Exports increased by 42.2% in FY24.
• India became world’s sixth-largest smartphone exporter in 2022 from 23rd in 2014.
• Exports above 31% of total smartphone output in FY24.

3. Sectoral trends

Merchandise Exports Bifurcation

• Both POL and non-POL exports declined in FY24.
• POL exports declined due to lower global petroleum product prices despite volume increase.
• POL exports increased by 80.8% from FY19 to FY24.
• Share of POL exports in global POL exports increased from 4.3% in 2018 to 4.8% in 2022.

Non-POL Products

• Engineering goods, electronics, and drugs & pharmaceuticals exports increased in FY24.
• Agriculture and allied products, chemicals, and textiles exports declined in FY24.
• Engineering goods dominated merchandise exports with a 25% share in FY24.
• Agri and allied products maintained around 11% share.
• Chemical and plastic exports grew from USD 31 billion in FY19 to USD 37.5 billion in FY24.
• Textile sector declined from USD 37.5 billion in FY19 to USD 34.8 billion in FY24.

Electronics and Pharmaceuticals

• India’s share in world electronics exports increased from 0.63% in 2018 to 0.88% in 2022.
• India’s rank in global electronics exports improved from 28th in 2018 to 24th in 2022.
• Share of electronics goods in merchandise exports rose from 2.7% in FY19 to 6.7% in FY24.
• India maintained strong foothold in drugs and pharmaceuticals sector.
• Sector’s share in exports grew from 5.8% in FY19 to 6.4% in FY24.
• Exports rose from USD 19.1 billion in FY19 to USD 27.9 billion in FY24.

4.Merchandise Imports

• Merchandise imports contracted by 5.7% in FY24 to USD 675.4 billion from USD 716 billion in FY23.
• Moderation driven by decline in petroleum, fertilizers, pearls, chemicals, and textiles imports.
• Merchandise imports rose from USD 106.5 billion in April-May 2023 to USD 116 billion in April-May 2024.
• Imports of capital goods increased, indicating potential investments in industrial infrastructure.
• Share of consumer goods in merchandise imports saw a marginal uptick.
• Share of intermediate goods in merchandise imports also slightly rose.

5.Services Exports

• India’s services exports expanded at a CAGR of more than 14% between 1993 and 2022.
• India’s share in world services exports rose from 0.5% in 1993 to 4.3% in 2022.
• India is the seventh-largest services exporting country globally.
• Healthy services export growth offset merchandise trade deficit.
• India’s deep integration into global software industry led to change in services exports composition.
• Shift from BPOs to upstream and high-value-added services.
• Russia-Ukraine conflict and global inflation led to rise in Global Capability Centres (GCCs).
• Other business services became second-largest contributor in services exports in FY24.
• Share of software exports in overall services exports declined from 50% in FY21 to 48% in FY24.

Journey of Global Capability Centres in India

Origin of GCCs

• Over 150 multinationals set up GCCs in India in last few years.
• Started with Texas Instruments in Bengaluru in 1985.
• Number of GCCs increased from 760 in 2012 to over 1000 in 2016 and 1600 in 2023.
• Projected to reach 2100 GCCs by 2028 with market size of USD 90 billion.
• GCCs employ 32 lakh people and generated revenue of USD 46 billion in 2023.

Role of GCCs

• GCCs provide bespoke services in operation, product development, and innovation.
• Operate across IT, BPO, engineering, and software product development service lines.
• Made a mark in banking, financial services, software, telecom, semiconductors, aerospace, automotive, oil and gas, healthcare, and pharma.

Government Support for GCCs

• Strategic interventions under Digital India and ease of doing business initiatives.
• Streamlined tax regulations, compliance procedures, and single window clearance.
• Improved digital infrastructure.
• State governments launching R&D policies to expand GCC landscape.
• Karnataka Digital Economy Mission aims for USD 300 billion contribution to India’s digital economy by 2026.

Partnership with Startups

• GCCs leveraging India’s engineering research and development service provider community, mature startups, and peer-GCC ecosystem.
• Established over 15 incubators, 40 accelerators, and multiple partner programs.
• Collaborations with startups in healthcare and pharma through innovation labs, hackathons, and incubators.

Expansion to Tier-II Cities

• GCCs evaluating tier-II cities for expansion due to reverse migration and cost arbitrage.
• Infrastructure development in tier-II cities adding to appeal.
• 22% of GCC centres set up in tier-II cities in H1 2023.

Rising Global Demand for India

• US and Europe-based MNCs have been establishing GCCs for a long time.
• Asia Pacific region, especially Japan and South Korea, setting up R&D/innovation centres in India.
• India remains a GCC favorite due to talent endowment and cost advantage.
• GCCs contribute more than 1% of India’s GDP.
• Government has crucial role in facilitating entry of GCCs.

6. Districts as Export Hubs (DEH) Initiative

• Launched in August 2019 to foster balanced regional development.
• Objective to select, brand, and promote products from each district.
• Boost manufacturing and exports from urban areas and generate interest in rural areas.
• Reiterated in India’s Foreign Trade Policy 2023.
• Focus @ 75 initiative identified 75 districts for targeted support.
• Key events: Vanijya Saptah, Dubai Expo 2020, Marine Buyer-Seller Meet.
• Provides financial inclusion, logistical, and infrastructural support.
• All States/UTs established State Export Promotion Committees (SEPC) and District Export Promotion Committees (DEPC).
• 567 Districts prepared Export Action Plans (DEAPs).
• Districts identified 304 unique products across 13 sectors.
• Promoting e-commerce exports through DEH initiative.
• 10 outreach events organized in first quarter of 2024.
• Collaboration with Exim Bank to boost exports under ODOP and DEH initiative.
• Exim Bank study identified 59 middle export districts with export potential.
• Support to 20 districts through Exim Bank’s GRID program.

Key Points

• Each district has potential to become an export hub.
• DEH initiative aims to promote balanced regional development.
• Focus on identifying and promoting unique products from each district.
• Government providing support through various initiatives.
• Collaboration with e-commerce partners to promote e-commerce exports.
• Partnership with Exim Bank to boost exports in identified districts.
• Overall aim to engage all districts in developing products for global market.

7.Changing Landscape of India’s Global Trade Arrangements

• India advocates for rule-based international trading system with WTO at its core.
• FTAs considered as instrument of trade liberalization and complement to WTO.
• Four new FTAs signed between 2021 and 2024: Mauritius, UAE, Australia, and EFTA.
• Focus on gaining access to Western and African markets.  

India-Mauritius CECPA

• India and Mauritius signed CECPA in February 2021.  
• India’s exports to Mauritius stood at USD 462.7 million in FY23.  
• Mauritius’s exports to India were USD 91.8 million in FY23.
• Trade grew by 168% in the last 17 years.
• CECPA covers trade in goods, rules of origin, trade in services, etc.  
• India offered market access to 115 sub-sectors in services.  

India-UAE CEPA

• UAE is India’s second-largest export destination.  
• Bilateral trade between India and UAE in FY24 was USD 83.7 billion.
• CEPA expected to increase bilateral trade in goods to USD 100 billion within five years.  
• Separate Annex on pharmaceuticals included in the CEPA.  
• India included digital trade within the ambit of FTA with UAE.  

India-Australia ECTA

• Australia was India’s 13th largest trading partner in FY24.
• India-Australia bilateral merchandise trade increased from USD 25 billion in FY22 to USD 26 billion in FY23.
• ECTA estimated to increase bilateral trade in goods and services to USD 45 billion in 5 years.  
• Agreement likely to benefit labour-intensive sectors of India.
• India offered market access to 103 sub-sectors in services.  

India-EFTA TEPA

• First FTA of India with any European country.
• Covers two-way trade in goods and services and bilateral investments.

FTA Negotiations

• India engaged in FTA negotiations with UK, EU, Australia, Peru, Eurasian Economic Union, and Sri Lanka.
• Reviews of existing FTAs with South Korea and ASEAN initiated.

8.Government Initiatives on Trade Facilitation and Reduction in Logistics Cost

• Government undertook measures to enhance production capacity, promote exports, and reduce logistics costs.
• Streamlined trade processes through Turant Customs, SWIFT, pre-arrival data processing, e-Sanchit, and Coordinated Border Management.
• CBIC undertook technological initiatives like electronic cash ledger, electronic clearances, online submission of IFSC Code, and electronic certificates of origin.
• Department of Posts developed Postal Bill of Export Automation System and launched Hub and Spoke Model with CBIC.
• PM GatiShakti National Master Plan and National Logistics Policy (NLP) launched.
• Digital reforms like Unified Logistics Interface Platform (ULIP) and Logistics Data Bank introduced.
• Improvement in India’s performance in UNESCAP’s Global Survey on Digital and Sustainable Trade Facilitation.
• Reduction in logistics cost reflected in improvement in India’s rank on World Bank’s Logistics Performance Index (LPI).
• Sagarmala scheme promoted port-led development.
• Goods and Services Tax (GST) reduced logistics cost.
• Improvement in India’s logistics performance reflected at State level through LEADS.

Key Points

• Government focused on enhancing trade facilitation and reducing logistics costs.
• Various initiatives taken to streamline trade processes and improve efficiency.
• Improvement in India’s ranking in global indices.
• Sagarmala scheme promoted port-led development.
• GST contributed to reduction in logistics cost.
• Positive shift in stakeholder perception at State level.

FAVOURABLE CURRENT ACCOUNT BALANCE

Current Account

• Current account is a record of a country’s international transactions.
• Trade is the dominant component of India’s current account.
• CAD narrowed to USD 23.2 billion (0.7% of GDP) in FY24 from USD 67 billion (2% of GDP) in FY23.
• Improvement in CAD due to narrowing trade deficit, rising net services exports, and increasing remittances.
• India’s CAD is relatively low compared to other nations.

Invisibles

• Net services receipts increased from USD 143.3 billion in FY23 to USD 162.8 billion in FY24.
• Net private transfer receipts (remittances) increased from USD 101.8 billion in FY23 to USD 106.6 billion in FY24.
• Net services exports and remittances contributed to surplus on invisible account.
• Remittances are second largest source of external financing after service exports.
• India is the top remittance recipient country with remittances reaching USD 120 billion in 2023.
• Remittances expected to grow to USD 124 billion in 2024 and USD 129 billion in 2025.
• India’s share in South Asian remittances increased to 64.5% in 2023 from 63% in 2022.
• Remittances are a stable source of finance unlike FDI.
• Remittances help finance merchandise trade deficit and contribute to narrowing CAD.

Key Points

• Current account improved in FY24 due to narrowing trade deficit and increasing invisibles.
• Net services exports and remittances contributed to surplus on invisible account.
• Remittances are a stable source of external financing for India.
• Remittances help offset goods trade deficit and stabilize CAD.

CAPITAL ACCOUNT BALANCE

Capital Inflows

• Net capital flows stood at USD 86.3 billion in FY24, driven by FPI flows and net inflows of banking capital.
• Net FPI inflows stood at USD 44.1 billion in FY24, highest level after FY15.
• India received highest equity inflows among emerging market peers in FY24.
• Inclusion of India’s Sovereign Bonds in JP Morgan Government Bond Index-Emerging Markets expected to contribute to higher debt inflows.

FDI Flows

• Global FDI declined marginally by 2% to USD 1.3 trillion in 2023.
• Weakening growth prospects, economic fracturing trends, trade and geopolitical tensions, industrial policies and supply chain diversification reshaping FDI patterns.
• M&As and project finance were weak in 2023.
• Greenfield investment project announcements increased by 2%.
• Net FDI inflows to India declined from USD 42.0 billion in FY23 to USD 26.5 billion in FY24.
• Gross FDI inflows moderated only by 0.6%.
• Contraction in net inflows due to surge in repatriation/disinvestment.
• Higher interest rates in developed countries and attractive exits out of India due to buoyant stock market also contributed to decline in FDI inflows.

Key Points

• Stable capital inflows financed CAD in FY24.
• Net FPI inflows saw significant turnaround in FY24.
• India received highest equity inflows among emerging market peers.
• Global FDI declined in 2023 due to various factors.
• Net FDI inflows to India declined due to surge in repatriation/disinvestment.

An examination of change in trend and composition of FDI flows

FDI Trends

• FDI decline in Industry and Services: FDI-to-GDP ratio for both sectors dipped below pre-pandemic levels.
• Shift from Physical to Digital FDI: Digital FDI increased due to rise in software, hardware, and telecommunication investments, while physical FDI (automobiles, pharmaceuticals, construction) declined.
• Impact of Protectionism and Geopolitical Tensions: Stagnation of physical FDI due to rising protectionism and non-equity modes of production.
• Digital FDI Surge During Pandemic: Increased due to work-from-home and digital infrastructure, but now declining due to slowdown in tech startups.
• Disparity Between FDI Inflows and Investment Intentions: India gaining market share in exports despite declining FDI.
• Shift in Investment Intentions: Moving from traditional sectors (computers, chemicals) to new and futuristic sectors (renewables, AI, data centers, EVs).
• India as an Attractive Destination for AI: Low operating costs and skilled workforce.
• Correlation Between Investment Intentions and FDI Inflows: High correlation till FY15, then diverged.
• FDI Concentration: High FDI inflows often concentrated in few sectors, not broad-based.

Challenges and Opportunities

• Need for Improved Accessibility: Make sectors with high investment intentions more accessible.
• Enhance Ease of Doing Business: Focus on improving business environment across all sectors.
• Competition with Advanced Nations: India competing with advanced nations offering subsidies and incentives.
• Importance of Education and Skill Development: Crucial for attracting and retaining FDI.

Shift in global manufacturing

Global Manufacturing Shift

• China + 1 Strategy: Companies diversifying supply chains away from China due to COVID-19, US-China tensions, and rising costs.
• Manufacturing Relocation: Shift to countries like Mexico, Thailand, and Vietnam.

India’s Opportunity

• Large Domestic Market: Attractive for companies to set up operations.  
• Focus on Electronics: Smartphone manufacturing and assembly driven by PLI scheme and rising domestic demand.  
• Export Growth: Increased electronic exports, especially to the US.  
• Learning from East Asia: Adopting strategies of reducing trade costs and facilitating foreign investment.  

Challenges and Strategies

• Trade Diversification: India aiming to integrate into global value chains, especially in renewable energy and advanced technology.
• Balancing Act: India needs to balance importing goods and capital from China.  
• FDI as a Key Strategy: Attracting Chinese FDI can boost exports to the US, similar to East Asian economies.  
• Mitigating Risks: Avoiding over-reliance on China and addressing potential economic coercion.

Comfortable Foreign Exchange Reserves

Foreign Exchange Reserves (FER)

• Moderation in CAD and large capital inflows led to FER increase of USD 68 billion in FY24.
• Highest increase among major FER holding countries.  
• FER stands at USD 653.7 billion (as of 21 June 2024).
• Covers more than 10 months of imports for FY25.  
• Covers more than 98% of total external debt.
• Acts as a buffer against global spillovers and provides liquidity.

Exchange Rates

• US dollar strengthened due to geopolitical risks, rising interest rates, and strong economy.
• Rupee under depreciation pressure but remained least volatile major currency.  
• Rupee depreciated by 2.9% against USD, 6.9% against Pound Sterling, and 6.8% against Euro in FY24.
• Appreciated by 3.5% against Japanese Yen.
• Rupee volatility reduced compared to previous years (CV 0.58 in FY24).
• Rupee stability attributed to strong macroeconomic fundamentals, financial stability, and improved external position.
• Expected to remain in a comfortable range due to robust foreign inflows and manageable trade deficits.

RBI Intervention

• Rupee exchange rate is market-determined.
• RBI regulates forex market to ensure orderly functioning.  
• Intervenes to curb undue volatility.  
• Managed to contain rupee volatility and stabilize forex markets.
• Introduced measures to diversify forex funding sources.
• Revised FPI investment rules to encourage foreign investment in Indian debt.

Exchange Rate Indices

• NEER depreciated by 0.6% in FY24.
• REER appreciated by 0.8% in FY24.
• NEER and REER are indicators of external competitiveness.  

 

INTERNATIONAL INVESTMENT POSITION (IIP)

Net International Investment Position (NIIP)

• NIIP Definition: Measures difference between external assets and liabilities.
• India as Net Creditor: Indian residents’ overseas financial assets exceed liabilities.
• Assets Increase: Primarily due to rise in reserve assets, FDI, trade credit, and loans.
• Liabilities Increase: Mainly due to portfolio investment, loans, direct investment, and other payables.
• Debt Liabilities: Account for 51.1% of total external liabilities.
• Net Claims: Non-residents’ net claims on India decreased to USD 361.7 billion.
• Asset Coverage: International financial assets cover 74% of liabilities.

STABLE EXTERNAL DEBT POSITION

Current Account, Savings, and Investment

1. Current Account and National Savings:
   • The current account balance can be seen as the difference between national savings (public and private) and investment.
   • A deficit in the current account often indicates a lower level of national savings compared to the desired investment level.
2. Role of External Debt:
   • External debt can supplement domestic savings, aiding in faster economic growth.
   • In developing economies, high economic growth is often linked to high external debt and vice-versa.
   • However, a large and unsustainable stock of external debt can create vulnerabilities and negatively impact growth.

India’s External Debt Management

1. Prudent Management:
   • India has managed its external debt prudently, focusing on keeping the current account deficit within sustainable limits.
   • The emphasis has been on encouraging non-debt creating external finance.
2. Sustainability of External Debt:
   • India’s external debt has remained sustainable over the years.
   • The external debt to GDP ratio decreased to 18.7% at the end of March 2024 from 19.0% at the end of March 2023.
   • The proportion of short-term debt (original maturity up to one year) in total external debt declined to 18.5% at the end of March 2024 from 20.6% at the end of March 2023.
   • The ratio of Foreign Exchange Reserves (FER) to total debt was 97.4% as of March 2024.

 

OUTLOOK AND CHALLENGES

Trade and Current Account

• Improved Trade Balance: Lower trade deficit in FY24 due to lower commodity prices and rising service exports.
• Current Account Surplus: Q4 FY24 saw a surplus of 0.6% of GDP.
• Future Outlook: Expected decline in trade deficit due to PLI schemes, manufacturing growth, and FTAs.
• CAD to GDP: Projected below 1% for FY24.

Challenges to External Sector

• Reduced Demand: Falling import volumes in major trading partners like the US.
• Rising Protectionism: Threat to trade recovery.
• Increased Trade Costs: Disruptions in shipping routes due to geopolitical events.
• Commodity Price Volatility: Impacts trade balance and inflation.
• Trade Policy Changes: Global export restrictions affecting India’s market access.

India’s Response

• Policy Balance: Balancing security concerns with economic growth through PLI and Make in India initiatives.
• Service Sector Focus: Leveraging India’s strength in services.
• Infrastructure Development: Enhancing logistics through INSTC and IMEC.
• Trade Agreements: Expanding market access through FTAs.
• Competitiveness Improvement: Enhancing product quality and safety.

Overall Goal

• Mitigating Global Challenges: Overcoming global demand fluctuations and protectionism to grow exports.
• Turning Challenges into Opportunities: Focusing on product competitiveness and policy stability.