India’s October trade figures deepen concerns about the health of our export sector. By data released on Friday, merchandise exports fell 1.1% from a year earlier to $26.4 billion last month. Though smaller than September’s 6.6% decline, it’s still bad news. Exports have been stuck in negative territory for three months in a row. A consolation was the sharp decline in the trade deficit to $11 billion in October from $18 billion a year earlier. This was on account of a 16.3% decline in imports, to $37.4 billion.

Overall, it’s a worrying picture. Exporters have had to suffer inordinate delays in the refunds due to them under the goods and services tax regime. Add to this India’s decision to walk out of the Regional Comprehensive Economic Partnership (RCEP), which will make access to a vast, rapidly-growing market difficult for them. As for bilateral trade deals, our record so far has not been encouraging. Making matters worse are New Delhi’s trade differences with the US. A settlement has proved elusive, even though policymakers on both sides aver that significant progress has been made on contentious issues.

If India is to revive its flagging export sector, it will have to reshape its policy mix in various ways. Local manufacturers need to be competitive globally. To this end, the recent reduction in corporate tax is a good move on the financial front, but past experience suggests that exposure to foreign competition is especially vital—which requires lowering import tariffs, not raising them. Then there are many other drags on business that need elimination. Unless export-oriented reforms

are undertaken, India risks missing the opportunity to grab some of the global value chains disrupted by the US-China trade war. That would be one costly miss.

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