Strategic road map needed to ensure growth in external trade: Eco Survey

The Economic Survey 2024-25 has called for a forward-looking strategic road map for India’s foreign trade sector to be ready to face the challenges of evolving global trade dynamics, including shifts towards trade protectionism and increased geopolitical uncertainties.

The Survey says that India needs to assess the situation to remain competitive in an ever-changing global market.

Presented in both Houses of Parliament on Friday, the Survey says India must continue reducing trade costs and improving facilitation to boost export competitiveness and enhance its participation in global supply chains.

“Much remains to be done to enhance trade competitiveness. The good news is that doing so is entirely in our hands. On its part, the industry must continue to invest in quality. The state produces governance, and the private sector produces goods and services. If both these actors focus on quality and efficiency, then despite the trade tensions and protectionism that are likely to come in the way of expanding global trade, India can increase its share in overseas markets and generate resources to sustain a higher level of capital formation”, the Survey states.

Reviewing the performance of India’s external sector so far during 2024-25, the Survey says the country continued to display resilience amidst global headwinds of economic and trade policy uncertainties. “Total exports (merchandise and services) have registered a steady growth in the first nine months of FY25, reaching $602.6 billion (6%). Growth in services and goods exports, excluding petroleum and gems and jewellery, was 10.4%. Total imports during the same period reached $682.2 billion, registering a growth of 6.9% on the back of steady domestic demand,” it says.

According to the Survey, the notable global trends in international trade include a rise in the political proximity of trade since late 2022 resulting in a preference for bilateral trade between countries with similar geopolitical stances. It also highlights increasing non-tariff barriers and government interference as reasons for impacting trade patterns. It acknowledged that import tariffs can have an impact on competitiveness, but states that if carried out in a calibrated way, tariffs can aid the goals of industrial policy and help in the development of desirable sectors in the economy.

A proactive approach in this regard will help India continue to thrive in an ever-changing global market, the survey states.