Editorial 1 : Global headwinds
Recent Context:
- Recently Trade data released by the Ministry of Commerce and Industry points towards a continuing weakness in India’s exports
Highlights of Trade related data:
- Merchandise exports fell to a nine-month low of $32.25 billion in July, a decline of almost 16 per cent. Alongside, goods imports also fell by 17 per cent to $52.9 billion.
- In the first four months of the financial year (April-July), exports and imports have now contracted by 14.5 per cent and 13.8 per cent respectively.
- While part of the decline can be traced towards lower commodity prices, both non-oil exports and imports have fallen indicating weak global and domestic demand. These are worrying signs.
Sector and regional specific decline in trade:
- The disaggregated data shows that 19 of the 30 major export items have declined during April-July.
- These also include labour intensive sectors such as gems and jewellery, leather products, textiles and others.
- However, electronic exports continue to grow at a robust pace, rising by 37.6 per cent in the financial year so far.
- As per an analysis by Crisil, the decline in India’s exports has been more pronounced in the Asia Pacific region.
- In the first two months of the financial year, exports to APAC declined by 21.8 per cent, followed by the US (12.9 per cent), Africa (8.6 per cent) and Europe (6 per cent).
- As per this analysis, the share of APAC in India’s goods exports has been on a decline since the beginning of the pandemic.
- While in 2019, the region accounted for 33 per cent of India’s merchandise exports, by 2022-23, its share in the country’s export basket had declined to 26.5 per cent, while the combined share of the US and the EU rose to 34 per cent.
Global economic situation which going to impact India’s export
- In the near term, slowing global demand and trade will continue to weigh down exports.
- As per the International Monetary Fund’s, World Economic Outlook report, the world economy is likely to grow at 3 per cent this year, down from 3.5 per cent the year before.
- Alongside, world trade volume growth (goods and services) is expected to slow down from 5.2 per cent last year to 2 per cent this year.
- In fact, growth this year is now projected to be 0.4 percentage points lower than the IMF’s earlier forecast.
The Government has taken the following measures to boost exports
- Foreign Trade Policy (2015-20) extended upto 31-03-2023.
- Interest Equalization Scheme on pre and post shipment rupee export credit has also been extended upto 31-03-2024.
- Assistance provided through several schemes to promote exports, namely, Trade Infrastructure for Export Scheme (TIES) and Market Access Initiatives (MAI) Scheme.
- Rebate of State and Central Levies and Taxes (RoSCTL) Scheme to promote labour-oriented textile export has been implemented since 07.03.2019.
- Remission of Duties and Taxes on Exported Products (RoDTEP) scheme has been implemented since 01.01.2021.
- Common Digital Platform for Certificate of Origin has been launched to facilitate trade and increase Free Trade Agreement (FTA) utilization by exporters.
- 12 Champion Services Sectors have been identified for promoting and diversifying services exports by pursuing specific action plans.
- Districts as Export Hubs has been launched by identifying products with export potential in each district, addressing bottlenecks for exporting these products and supporting local exporters/manufacturers to generate employment in the district.
- Active role of Indian missions abroad towards promoting India’s trade, tourism, technology and investment goals has been enhanced.
Way Forward
- Investment in Infrastructure sector: Improved infrastructure and logistics are critical for enhancing export competitiveness.
- India should prioritise investments in transportation networks, ports, customs clearance processes, and export-oriented infrastructure such as export promotion zones and specialised manufacturing zones.
- This can reduce transportation costs, improve supply chain efficiency, and boost export capabilities.
- Skill Development and Technology Adoption: Skill development programs should be implemented to enhance the availability of skilled labour in export-oriented industries.
- Additionally, incentivizing and promoting technology adoption, such as automation, digitization, and Industry 4.0 technologies, can boost productivity, competitiveness, and innovation in the export sector.
- Exploring Joint Development Programmes: Amidst a wave of deglobalisation and slowing growth, exports cannot be the sole engine of growth.
- India can also explore joint development programmes with other countries in sectors like space, semiconductor, solar energy to improve India’s medium-term growth prospects.
Conclusion:
Considering its broader economic implications such as on job creation and the current account, policy must focus on boosting merchandise exports
Editorial 2 : The U20 Promise
Recent Context:
- On July 7 and 8, Ahmedabad hosted the Urban 20 (U20) summit. In the history of G20 meetings, the Summit was the sixth of its kind.
About U20
- Urban 20 or U20 is a city diplomacy initiative, comprising of cities from G20 countries.
- It strives to establish a lasting practice of engagement among cities to develop a collective message that emphasizes the role of cities in taking forward the sustainable development agenda
- U20, established in 2018 to generate discussions among G20 members on urban issues, was first chaired and hosted by the city of Buenos Aires.
- For this year, the leadership was handed over to Ahmedabad as the 2023 Chair from the city of Jakarta, the Chair for 2022
Ahmedabad city is a model for urban development with concern
- First, Ahmedabad is a very good example of how cities in the Global South can achieve infrastructural development goals.
- The city has been comparatively successful in its implementation of innovative and liberal urban planning policies and as a result, has been able to organise its expansion better than most Indian cities.
- Ahmedabad has also shown what good quality public spaces can do for a city’s residents and its businesses.
- The city has executed some very challenging large-scale public projects in the last three decades and has become an example for many others to follow.
- Second, Ahmedabad also shows exclusionary and catastrophic socio-legal urban governance.
- The city is one of the most communally segregated urban areas in the country.
- Scholarship has shown that parts of the city that are homogeneously occupied by minorities and underprivileged caste communities — areas such as Dani Limda, Juhapura, etc. are neglected by the government.
Recommendation made for upcoming G20 meet:
- It gives a promising six-point message
- Encouraging environmentally responsible behaviours
- ensuring water security
- accelerating climate finance
- championing local culture and economy
- re-inventing frameworks for urban governance and planning, and
- catalysing digital urban futures.
- While being heavy on the agenda of climate change and climate justice, the Communique also argues for equality and justice in urban development.
Certain areas of concern which are not addressed by U 20
- Over the last two decades, India has shown enthusiasm towards planned urban development, which is much needed and commendable.
- However, Mayors Summit’s conversations failed to address the Gujarat’s unique Disturbed Areas Act and the politics of urban exclusion and forced segregation along religio-ethnic lines.
- As communal narratives and segregation have made urban development increasingly exclusionary. This has distributed the costs and benefits of development unequally with communal identity acting as the marker of this distribution.
Conclusion:
- The upcoming G20 meet is a good opportunity to reflect upon and judge India’s own urban governance and politics against the vision of the U20 Communique.
- Therefore, the upcoming G20 meeting should focus on issue of urban exclusion so that inclusive urban growth can be achieved and vision of G20 motto “One Earth, One Family, One Future” can be realised in letter and spirit.