Indian Economy
Doubling India's Exports
- 23 May 2019
- 3 min read
The high-level panel constituted by Commerce and Industry Ministry has recommended a host of measures for doubling India's exports of goods and services to over USD 1,000 billion by 2025. The panel was headed by economist Surjit Bhalla.
Recommendations
- It has suggested issuance of 'Elephant Bonds' wherein people declaring undisclosed income will have to mandatorily invest half of that amount in these securities.
- "Elephant Bond" is a 25-year sovereign bond in which people declaring undisclosed income will be bound to invest 50 per cent.
- The fund will be utilised only for infrastructure projects
- Tax rates: Lowering effective corporate tax rate, bringing down cost of capital and simplifying regulatory and tax framework for foreign investment funds.
- Increasing capital base of EXIM Bank by another Rs 20,000 crore by 2022.
- Free trade agreements: Seeking inputs from industry and MSMEs before signing free trade agreements (FTAs) and sensitising them of its benefits.
- There is a need for an in-depth assessment of the existing agreements and their impact on the competitiveness of the Indian industry;
- Remedial measures, to be considered for future FTA negotiations and maintaining a database based on such assessment.
- WTO measures: state governments need to be closely involved in improving the competitiveness of exports by providing support measures in a WTO (World Trade Organisation) consistent manner.
- Tariff structure: building a comprehensive export strategy and rationalise tariff structure.
- Industry-specific suggestion includes:
- Textiles and garments sector: modification in labour laws (like the Industrial Disputes Act, 1947) to remove the limitation on firm size and allow manufacturing firms to grow.
- Medical tourism: Setting up of a pan-India tourism board to promote medical value tourism. Simplification in the medical visa regime.
- Agriculture exports: abolishing Essential Commodities Act and the APMC (Agricultural Produce Market Committee) to promote agricultural export.
- Medical sector: a single ministry for medical devices and separate regulation for this sector.
- Benefits: Promoting exports helps a country to create jobs, boost manufacturing and earn more foreign exchange.
