During Prime Minister Narendra Modi’s recent visit to the USA, he met with many American CEOs: Tesla’s Elon Musk, Amazon’s Andy Jassy, Apple’s Tim Cook, Google’s Sundar Pichai, Boeing’s David L Calhoun, etc. Many of these companies announced new investments, new initiatives, and partnerships into India.
After the PM’s visit to the USA, Amazon has announced that it will take its investments in India to USD 26 billion by 2030 through a mix of equity investments, partnerships, and operational, infrastructure, and ecosystem investments. Google’s CEO Sundar Pichai mentioned that Google is planning on investing USD 10 billion in India’s digitization fund.
Across the world, June 27th is earmarked to celebrate MSMEs and their immense contribution to the economy. The MSME sector of India contributes around 33% of India’s total GDP and is predicted to contribute worth USD 1 trillion to India’s total exports by 2030. In the Budget 2023-24, the Ministry of Micro, Small, and Medium Enterprises provided many facilities including extension of credit schemes, reduction in tariffs and duties on imports and exports to make it more affordable for MSMEs to participate in international trade, among others.
Under the Foreign Trade Policy 2023, MSMEs will receive various incentives and support to enhance their exports. One of the key benefits is the reduction of compliance costs for exporters. The policy will simplify the export procedures and reduce the time taken for clearance, which will help MSMEs save costs and improve their competitiveness.
The key approach to the FTP policy is based on these 4 pillars: (i) Incentive to Remission, (ii) Export promotion through collaboration – Exporters, States, Districts, Indian Missions, (iii) Ease of doing business, reduction in transaction cost and e-initiatives, and (iv) Emerging Areas – E-Commerce, developing districts as export hubs and streamlining SCOMET policy.
Global Export Opportunity
● According to UNCTAD, the global B2C e-commerce market was about USD 5 trillion in 2019. Of this, B2C e-commerce international trade is about 9% and is growing each year
● Key factors of cross-border trade, a global phenomenon:
○ Lowered entry barriers for exporters
○ Customers seeking diverse products outside home countries.
○ Advanced technologies offered by e-commerce export programs.
● Indian Government initiatives: ○ Entitlement of e-commerce in Foreign Trade Policy ○ Foreign Trade Agreements ○ Dedicated portal for MSME exporters ○ Districts as export hubs ○ DGFT e-platform
Indian Exports
● India’s overall exports are projected to scale new heights, growing at 13.84% during FY2022-23 to achieve USD 770.18 billion worth of exports. ● Merchandise exports have registered the highest ever annual exports of USD 447.46 billion with 6.03% growth during FY2022-23, surpassing the previous year (FY2021-22) record exports of USD 422.00 billion. ● Services exports lead the overall exports growth and are projected to set a record annual value of USD 322.72 billion with a growth rate of 26.79% during FY 2022-23. ●
