India’s exports of goods and services soared above $750-billion in the 75th year of Independence as we celebrated Azadi Ka Amrit Mahotsav. The record performance in 2022-23 is a remarkable achievement in a challenging global environment, with the pandemic, followed by the Ukraine conflict, disrupting business activity around the world. The stellar performance, amid global headwinds, is part of a broader story of India’s emergence as a force to reckon with on the global stage under the decisive and visionary leadership of Prime Minister (PM) Narendra Modi. Whether it is the record foreign investment even during the pandemic, trade deals with developed countries, or world-leading performance in vaccination, distribution of free food, adoption of LED bulbs, building renewable energy capacity, direct benefit transfers or the dramatic growth in digital payments, the world is applauding India. The foundation of this performance was laid in August 2021 when the PM interacted with the heads of Indian missions abroad and other stakeholders in India’s foreign trade. In this unique initiative, in step with the PM’s whole-of-government approach, secretaries of more than 20 departments, state government officials, members of export promotion councils and chambers of commerce participated.
The PM gave a strong message for the industry to adopt high technology, become competitive and focus on quality. He also said the government and exporters should walk shoulder to shoulder. The commerce and industry ministry regularly interacts with exporters in this spirit.
India’s merchandise exports soared to a record $422 billion in 2021-22. This performance put Indian exports in a different league, far above the previous record of $330 billion. Services exports also set a new record of $254.53 billion. Many experts felt that the performance of merchandise exports was a one-off show, which would be difficult to replicate.
The initiative of PM Modi set the ball rolling for the record-breaking performance, even though our strategy for foreign trade, like every other policy of the Modi government, gives top priority to national interest and the welfare of the poor. For the Modi government, compassion for the poor and support for small enterprises is more important than setting records.
To control domestic prices, the government restricted or discouraged exports of various products and commodities, including wheat, sugar, rice, iron ore, steel, and petroleum. This smoothened domestic supplies, helped consumers and small businesses and shielded them from volatility. It kept India’s inflation much lower than western countries. Our merchandise exports would have been significantly higher without these steps that were consciously taken.
The Modi government has run the extra mile to make it easier for manufacturers to do business, build world-class infrastructure, encourage small businesses to think globally, raise quality standards and open new markets with trade deals to help our exporters. The PM Gati Shakti National Masterplan, Jan Vishwas Bill, ease of doing business initiatives, national logistics policy, single-window clearance, PM MITRA textiles parks, and the rapid development of expressways and rural roads are some of the initiatives that help all businesses and boost exports.
The initiatives of the Modi government to encourage exports in new sectors are also delivering results. For example, India’s defence exports in 2022-23 rose to a record ₹15,920 crore and are poised to grow exponentially in the years ahead. The PM, who has ably steered India’s export strategy, rightly observed that this was a clear manifestation of India’s talent and enthusiasm towards “Make in India”.
Similarly, India has emerged as a big exporter of toys, after being almost totally import dependent. The Modi government’s policy of enforcing quality control and supporting manufacturers helped the sector turn around. As a result, exports of electronics goods, with leading companies such as Apple making in India for the world, have also grown spectacularly.
Services exports are another exciting story rooted in the PM’s Digital India initiative. Strong and decisive steps taken by the Modi government have built a robust digital backbone, which helped India seamlessly adapt to working from home during the pandemic. The phenomenal growth of India’s digital infrastructure, along with the dedication and determination of Indians, helped the country honour all its service commitments and emerge as a “trusted partner” for the world.
India’s digital infrastructure has empowered businesses and the common man, helping the country weather the pandemic and maintain business activity, including exports. A working paper of the International Monetary Fund (IMF) recently lauded India’s effort. “Using this digital infrastructure India was able to quickly provide support to an impressive share of poor households during the pandemic. In the first months of the pandemic about 87 percent of poor households received at least one benefit … India’s journey highlights lessons for other countries embarking on their own digital transformation,” it said. India’s services exports are growing rapidly and poised to set new records, but there are challenges ahead. The World Bank and IMF’s forecasts for global economic growth are not encouraging. The World Trade Organization’s forecast of international trade is also gloomy. Despite such headwinds, the growth engines of the economy in India continue to be robust. This makes us optimistic that exports of goods and services will rise to $1 trillion each by 2030.