India needs to take right, policy steps for foreign trade, so that it can work for sustainable development. This goal can be achieved only by moving on the path of economic reforms. Now is the era of digital economy. Therefore, the obstacles coming in this path also have to be removed.
In the recent reports on India’s foreign trade, two things are underlined. The first is that the conditions of foreign trade are favorable for India even in the midst of economic and financial challenges. At present, a new chapter of India’s foreign trade agreements and trade negotiations with developed, developing and neighboring countries is being written. Secondly, in order to increase India’s foreign trade, now along with the open and free trade policy, attention will have to be paid to the policy of essential imports.
The fourteenth summit meeting of the BRICS countries (Brazil, Russia, India, China and South Africa) took place last week. India’s global trade with BRICS countries is growing rapidly. The total share of these countries in the global population is forty one percent. The BRICS group contributes twenty-four percent to global GDP and sixteen percent of global trade. Addressing the BRICS Business Forum, Prime Minister Narendra Modi also said that the reforms and innovations taking place in the Indian economy after the Corona era, it is the best opportunity for entrepreneurs and businessmen of BRICS countries to invest in India.
Some time ago Indo-Pacific Economic Forum (IPEF), a business organization of thirteen countries including India, was formed under the leadership of America. After the informal meeting held in Paris on June 11 this month, the prospects of increasing exports from India and foreign trade with its member countries have strengthened. In fact, IPEF is the first multilateral agreement in which India has joined. This includes the US, India, Japan, Australia, Brunei, Indonesia, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand and Vietnam.
After India’s participation in this forum, a new era of Indo-US trade and economic relations has started. The economic partnership between the two countries is increasing rapidly. Significantly, there are two hundred Indian companies operating in America and more than two thousand American companies are active in India. Now the economic partnership between the two countries will grow rapidly.
According to data released by the commerce ministry last month, bilateral trade between the US and India stood at USD 119.42 billion in the fiscal year 2021-22, up from USD 80.51 billion in 2020-21. Exports from India to the US increased to $76.11 billion in 2021-22 from $51.62 billion in 2020-21. India’s imports from the US increased to $43.31 billion in the year 2021-22 from $20 billion in the previous year. The special thing is that America is one of the few countries with which India is in a position of trade surplus and now America has become India’s largest trading partner, surpassing China.
In the midst of the situation created after the COVID-19 and after the Ukraine war, the big challenge before India is to increase foreign trade. Last month, at the second summit of the Quad, the strategic forum of the US, India, Japan and Australia, the four countries concocted the coordinated power and promised to invest more than 50 billion dollars on infrastructure, with the Quad becoming a major factor in India’s industry-business. May prove to be a milestone in development. In addition, India’s bilateral trade relations with the G-7 and G-20 countries have grown significantly in recent years.
India’s foreign trade will also increase due to new economic agreements made with European countries this year i.e. 2022. It is also important to note that India has materialized Free Trade Agreements (FTAs) with the United Arab Emirates (UAE) and Australia in a very short span of time. Progressive talks for FTAs with the European Union, the UK, Canada, the six Gulf Cooperation Council (GCC) countries, South Africa, the US and Israel are also opening new avenues.
At present, India is also working fast on effective implementation of ‘Neighbourhood First’ and ‘East East’ policy. Last month, Prime Minister Narendra Modi discussed all aspects of multi-faceted bilateral ties with Nepal’s Prime Minister Sher Bahadur Deuba and signed six agreements on strengthening cultural ties, cooperation in the education sector and projects related to hydroelectric power. Similarly, last month, Ranil Wickremesinghe, after taking over as the Prime Minister of Sri Lanka, indicated to rapidly increase economic cooperation with India. India provided $2.4 billion in aid to Sri Lanka in March-April 2022 so that it can import medicines, diesel supplies and other essentials.
Apart from this, the new possibilities of trade for India with BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technological and Economic Cooperation) countries are also going to play a big role in foreign trade. Of the seven BIMSTEC member states, five are from South Asia including India, Bangladesh, Bhutan, Nepal and Sri Lanka and two from Southeast Asia, Myanmar and Thailand.
The organization also provides an opportunity for India to counter the expansionist effects of China’s ‘One Belt, One Road’ initiative in countries around the Bay of Bengal. The fifth summit of BIMSTEC was held in March this year hosted by Sri Lanka. In this, India had insisted on moving forward on the proposal of a free trade agreement to increase mutual trade among the member countries of BIMSTEC.
As the importance of agriculture and food grain trade has increased in the country’s foreign trade, global trade of agriculture will have to be increased with more strategic efforts for agricultural exports. Agriculture business plays an important role in the foreign trade of the country. There is abundance of food grains in the country and there is no shortage of wheat also, India is exporting wheat to neighboring, poor and other countries to meet their food security needs.
In the year 2021-22, more than seven million tonnes of wheat was supplied overseas deals from India. Last year in 2021-22, agricultural exports worth more than fifty billion dollars were exported from India and now this year their exports are likely to increase further. It is also worth mentioning here that the World Trade Organization (WTO) of one hundred and sixty four countries, which was considered dead, has got a revival from the twelfth ministerial conference held in Geneva in June 2022. The way many controversial issues like fisheries subsidy to vaccine patent protection were agreed in this conference, this will also increase the compatibility of India’s foreign trade.
In the current global situation, India needs to take the right policy steps for foreign trade, so that it can work for sustainable development. This goal can be achieved only by moving on the path of economic reforms. Now is the age of digital economy. Therefore, the obstacles coming in this path also have to be removed. Under the self-reliant India campaign and Make in India, there is a need to increase the production of such items, which can reduce imports and increase exports. Due to this the increasing trade deficit of India will also be reduced.