Editorial 1 : The trade push
Introduction: Since the middle of 2022, the value of global merchandise trade has shrunk continuously as per data from the United Nations Conference on Trade and Development. In fact, in 2023, global merchandise exports fell by 4.6 per cent. The January-March 2024 quarter, though, saw some sequential improvement.
India’s trade performance amid global uncertainty
- India’s performance has been largely in line, with merchandise exports falling 4.7 per cent in 2023.
- This, however, was better than developing Asia as a whole, which saw merchandise exports decline by 6.8 per cent.
- In 2023-24, India’s merchandise exports stood at $437.1 billion, down 3.1 per cent from 2022-23.
- But the monthly data does suggest a pick up — after an 8.9 per cent contraction in the first half of the year, exports grew by 2.8 per cent in the second half.
- In the last quarter of 2023-24 — a period when the threat of Red Sea disruptions on exports was partly playing out — exports grew at a faster pace of 4.5 per cent.
Performance of major constituents of India’s trade
1. Petroleum products
- In 2023-24, the sharp decline in crude oil prices was a big contributor to the fall in India’s overall merchandise export bill.
- India’s petroleum export bill was $13.3 billion lower, as crude oil prices fell $13 per barrel.
- With more than a 20 per cent share, oil is India’s single largest export item and hence, its movement has a large bearing on total merchandise export earnings.
- In volume terms, though, India exported more petroleum products last year.
2. Electronics Goods
- The impressive 24 per cent growth in electronics goods exports last year reflects surging exports of telecom instruments or mobile handsets, spurred by the Production Linked Incentive scheme.
- The heft of electronics exports is visible from the fact that barring these, core exports registered a marginal decline last year.
- The share of electronic goods in the country’s merchandise exports has risen significantly — from around 2 per cent in 2017-18 to 6.5 per cent in 2023-24.
- While India continues to have a deficit in electronics goods trade, the ratio of value of electronic exports to imports has improved from 0.11 to 0.34, largely led by a surge in the share of telecom instruments.
3. Miscellaneous products
- Excluding petroleum and gems and jewellery exports (the other top export item which was also down 13.8 per cent last year), core exports were up 1.4 per cent, despite the broad-based decline in international commodity prices.
- This indicates that India was able to ship a higher volume of goods.
- According to quick estimates of the Ministry of Commerce and Industry, items with as much as 45 per cent share (in dollar terms) in India’s merchandise exports managed to grow last year.
- Other large core categories such as drugs and pharmaceuticals, engineering goods and agricultural goods also saw healthy export growth.
- It is also noteworthy that despite the ban on non-basmati rice and wheat and some other curbs from time to time, overall agriculture and allied exports growth, led by other categories such as meat and poultry products, spices, fruits and vegetables, oil meals, oil seeds and unmanufactured tobacco remained healthy.
India’s largest export destinations
- In terms of the country of destination, oddly, goods exports to the US — India’s largest market with solid economic growth in 2023 — contracted in 2023-24 as its growth was largely led by the services sector.
- However, there has been an uptick over the past few months.
- On the other hand, exports to the Euro region grew last year despite a sharp economic slowdown in the region, which has also been vulnerable to geopolitical uncertainties.
- While exports were largely led by petroleum products, other key items such as machinery, pharmaceutical products and auto and auto parts also rose.
- India’s exports to the Gulf Cooperation Council (GCC) countries also rose, reflecting a further increase in exports to the UAE — the largest export destination of Indian goods in the GCC region.
- It is noteworthy that India’s gems and jewellery exports to UAE increased by a whopping 42.3 per cent during April-February 2023-24 even as India’s overall gems and jewellery exports declined by 14.5 per cent during this period.
Low exports from labour-intensive sectors are a concern
- However, it is a matter of concern that exports of labour-intensive sectors such as gems and jewellery, textile products (largely ready-made garments), leather and leather products, marine products and plastics, declined last year.
- In fact, the share of most of the labour-intensive categories in the country’s merchandise exports has come down drastically over the last decade.
- For instance, the share of gems and jewellery exports in India’s merchandise exports fell from 13.2 per cent in 2014-15 to 7.5 per cent in 2023-24.
- Similarly, the share of textile exports is down from 11.1 per cent to 7.5 per cent. Arresting this decline must be a priority.
The global growth in trade is in favour of India’s export growth
- India’s exports are the upward revision with the global growth and trade projections by multilateral agencies.
- S&P Global expects global growth at a healthy 3.2 per cent in 2024 compared to 2.8 per cent earlier.
- WTO projects world trade volume to grow 2.6 per cent in 2024 from -1.2 per cent in 2023.
- Bilateral free-trade agreements with major economies and the ongoing push to manufacturing should also spur India’s exports in the near to medium term.
Conclusion: In the base-case scenario, exports should grow at a healthy rate and contribute to the overall growth momentum. The spoilers would be uneven global growth and geopolitical tensions which will bear watching.
Editorial 2 : A healing touch
Introduction: A year after it was jolted by ethnic violence, Manipur continues to be on the edge. The state has not seen large-scale violence in the last eight months. However, lives continue to be lost in clashes between Meiteis and Kuki-Zomis, falsifying the return of normalcy in Manipur.
The after-effects of Manipur violence
- The scars created by the conflict are admittedly deep – more than 200 people have lost their lives, families languish in refugee camps and there have been reports of gruesome violence against women.
- Vigilante groups continue to take the law into their hands.
- But great harm has also been done by the state government’s lack of will to initiate a meaningful dialogue between the warring communities.
Recent violence during Lok Sabha polling
- An incident took place two days after the conclusion of round two of the Lok Sabha polls.
- One person lost his life and two others were injured after residents of two adjoining villages waged a gun battle in the early hours of Sunday.
- A day earlier, two CRPF personnel were killed and two others sustained injuries following a blast at the paramilitary force’s outpost in Bishnupur district — one of the most brazen attacks on security forces in the past year.
- Violence against security forces has, in fact, been one of the recurring features of the conflict, highlighting that force alone cannot quell a situation that requires sensitivity and compassion in equal measure.
Efforts by the government to start a dialogue among communities
- After the first conflagration on May 3 last year, Union Home Minister Amit Shah announced the formation of a committee with representatives from different ethnicities, political parties and civil society, to begin the process of healing.
- That the committee ran into internal differences soon after does have much to do with the complexities of Manipur’s society.
- The situation is also made more fraught by landholding patterns and the continuing impact of colonial policies that segregated the state’s tribal-dominated hill areas from the Meitei-dominant Imphal Valley.
- But in the past year, CM Biren Singh’s government has done very little to assure communities, especially the hill tribes, that his administration is above the identity politics that has pushed the state to the brink.
- His regime has, instead, stoked tensions and aggravated faultlines with its incessant evocation of the insider-outsider trope.
The lacunas in the Manipur State government’s efforts to normalize the situation
- The Manipur government has done well to crack down on drug smugglers.
- But it continues to gloss over political and administrative failures by blaming the problem on illegal migrants from Myanmar with whom the Kuki-Zomis share a common ethnicity.
- In all this, measures to improve livelihoods in a state that has the third lowest per capita income in the country — it ranked the highest in the northeastern region in the 1990s — have taken a backseat.
- The healing touch Manipur requires must necessarily be a combination of economic, political and administrative measures.
- The Biren Singh government would be failing its mandate if it did not recognise this imperative, even after a year of strife in the state.
Conclusion: One year after Manipur violence, the state needs a combination of economic, political, and administrative remedies. A healing touch from the state to heal the scare of the ethnic violence and animosities among communities.