India's Chief Economic Adviser, V Anantha Nageswaran, emphasized the risks associated with growing protectionism and de-globalisation in the global economy that may impact India's export growth. He cautioned against expecting that global growth and exports would significantly boost domestic exports, emphasizing the need for India to prioritize investments in human capital, research and development, quality enhancement in sectors like pharma exports, and policy deregulation. Nageswaran underlined the importance of focusing on improving logistics performance to support export growth.
While acknowledging recent growth in India's merchandise exports by close to double digits over the past seven months, excluding oil and gems and jewellery, Nageswaran cautioned against being overly optimistic. He noted that while India's export growth is linked to global export growth, the country needs to focus on improving its competitiveness in terms of quality, cost, and value for money to capitalize on global market trends. Nageswaran pointed out that the global economic landscape is shifting towards de-globalisation, especially with the upcoming inauguration of the new U.S. President, Donald Trump, and recent geopolitical developments like the situation in Ukraine.
Nageswaram highlighted the changing dynamics in global trade, with a trend towards geo-economic fragmentation and increased trade protectionism. He emphasized the need for India to be aware that relying solely on global GDP and export growth to drive its own export growth would no longer be sustainable. Additionally, provisional data showed a growth of 17.25% in India's merchandise exports in October, with a trade deficit of $27.14 billion during that month. Nagesh Kumar, Director of ISID, also stressed the revival of industrial policy globally and its importance for India, especially given the country's large and youthful workforce, underlining the critical role of the manufacturing sector in driving economic growth and employment.