Finance Ministry reviews that there are Scopes to add more quality and complexity to India’s exports

NEW DELHI : There is scope to add more quality and complexity to India’s exports, given the existing capabilities, the Finance Ministry said in its economic review for January. It also said that despite subdued global trends dictating the course of Foreign Direct Investment (FDI) flows to India lately, the country continues to chart its way forward and remain a preferred destination. The FDI inflows were 2.5% of GDP in FY15-23 as against 2.2% in FY FY05-14, it said.

Highlighting that though the export mix, in terms of the principal commodity classification, has not “changed much” over the years, the ministry said: “There has been progressive diversification in India’s export basket, and there is scope for adding more quality and complexity to exports, given the existing capabilities”.

As per the review, in terms of absolute numbers, the pick-up in total exports (merchandise plus services) has been evident since FY22, when it reached $683.7 billion, followed by $781.4 billion in FY23. On average, the share of net exports to GDP improved to (-)2.6% in FY14-24 from (-)4.1% during FY04-13.

“India’s exports have been showing remarkable performance, logging record-high levels since FY22, with merchandise exports rising by more than 50% and services exports by 120% over the past decade (FY13-23),” it said.

The highest-ever merchandise export of $451.1 billion was achieved in FY23. However, the pace of growth moderated in FY23 due to persisting geopolitical tensions.

India has a target of $2 trillion exports by 2030.

On FDI front, the ministry said that India is a large pull factor for foreign investments due to its young workforce, large middle-class population, progressively transparent and liberal measures, and policies such as the production-linked incentive scheme and Make in India.

“It is creditable that despite the shock of the pandemic and conflict in Europe, India’s FDI inflows were higher in this period than in the earlier period, which was marked by a global economic and capital flow boom,” it said.

The CAGR for FDI in India during FY13-23 was 28%.