Govt plans new trade body to push exports

Currently, export promotion activities are done by various ministries, councils and state governments.
Currently, export promotion activities are done by various ministries, councils and state governments.

Summary

The commerce ministry has proposed a unified body to coordinate trade promotion efforts, as the global economy appears headed for a deep slump.

The commerce ministry has proposed creating a unified body to strategize and coordinate trade promotion efforts, as the global economy appears headed for a deep slump because of the continuing conflict in Ukraine and China’s struggles with covid-19.

The proposed organization aims to boost collaboration among various export promotion entities, with a focus on expanding into non-traditional markets such as Latin America and Africa to drive trade growth, government officials aware of the development said, requesting anonymity.

“Currently, export promotion activities are done by various ministries, councils and state governments. CII has been requesting a national export mission, and one of the pillars under this is a dedicated export promotion body that can converge resources and initiatives to build the India brand, facilitate Indian exporters to access overseas markets and assist overseas buyers in connecting with exporters," said Sanjay Budhia, chairman of CII National Committee on Exports.

India’s merchandise exports are affected by a demand slowdown in key markets, with outbound shipments at $32 billion in November, little changed from the corresponding month last year, according to official government data. Merchandise exports contracted 16.7% to $29.8 billion in October.

Presently, there are 14 export promotion councils under the administrative control of the commerce department. These are registered as non-profit organizations under the Companies Act/Societies Registration Act. These include the Apparel Export Promotion Council, Engineering Export Promotion Council, Services Export Promotion Council, Carpet Export Promotion Council, and Pharmaceuticals Export Promotion Council.

“There is no need for so many sector-wise councils. If an exporter has to export engineering goods, membership in the engineering council is required. If he has to export pharma products, membership for pharma council membership is required. That adds to the cost. A member pays 15,000 to 50,000 annually depending on the turnover of the company," said Vijay Kalantri, president of the All India Association of Industries and chairman at MVIRDC World Trade Center, Mumbai.

Kalantri further stated that the main aim of the body should be to promote exports and explore newer markets and focus on getting technology which can ramp up manufacturing in the country.

Biswajt Dhar, a professor at Jawaharlal Nehru University, said that export promotion could not be centred on ad hoc schemes.

It needs a comprehensive strategy, prioritizing the perspectives of exporters, Dhar said, emphasizing the importance of a robust organization that aligns activities with export promotion councils.

“A single umbrella body to coordinate exports can avoid duplication of efforts and will remove the silos giving every organization a 360-degree view on exports facilitation and support," said Ajay Sahai, director-general of the Federation of Indian Export Organisations.

Export promotion councils assist Indian exporters in facilitating access to international markets, promoting Indian products through various activities and increasing overall exports from India. These are government-initiated bodies that promote and support export firms in developing their overseas trade and presence by providing technical and industry insights. They also promote government schemes and help with research and outlook estimation.

If every organization works to support exports within the overall framework provided by the nodal organization, we will be reaching the $2 trillion goods and services exports target by 2030, Sahai added.

Reform measures by the commerce ministry come at a time global growth is expected to decline sharply. According to the World Bank, global growth is expected to slow to 1.7% in 2023, the third weakest in nearly three decades, overshadowed only by the global recessions caused by the pandemic in 2020 and the global financial crisis in 2009.

Growth projections have been downgraded for almost all advanced economies and about two-thirds of emerging markets and developing economies in 2023 and for about half of all countries in 2024.

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