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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.
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