From 1990-to 1991 India opened its market to global players, and there has been a significant rise

in the
country’s foreign trade – exports have increased more than 16 times and imports more than 19 times. In
FY 2020-21, India’s imports and exports stood at US$394.43 billion and US$291.80 billion, respectively.

 This year for the first time in history India’s annual goods exports crossed the US $ 400
billion.
 The achievement of $400 billion in merchandise exports represents a growth of over 21
percent from $330 billion achieved in FY2019 prior to the Covid-19 pandemic. It adds
yet another feather in the hat of the Indian Economy and shows its potential to lead
the global market.
 Exports have registered a 37% increase as compared to the previous year and 21%
over the previous record high of exports of US$ 330 billion set in FY2018-
19. Engineering exports have increased to 46.5% i.e: hitting the mark of US$ 100
billion for the first time. Chemicals, cotton yarn, handloom products, and the apparel
industry have also done exceptionally well

India had significantly boosted exports to key trading partners with outbound shipments to
the UAE increasing by 65% during the fiscal and exports to the US increased by 46%.

 
Significance of Increase in Exports
Resilience Capabilities: India has performed well to achieve its export target despite supply
disruptions due to the pandemic, the challenging shortages of shipping containers, and
surging freight rates.
Huge Growth Potential: The rise in exports shows the high rate of growth that India can
achieve with the right vision and steps. The 40% growth in FY2021-22 compared to 2020-21
is India’s fastest export growth rate since 2009-10.
Trivia: China’s total exports stood at the US $3.3 trillion in 2021! Almost eight times what we are
exporting

Reasons behind India’s feat

 It was achieved due to an increase in shipments of merchandise, including engineering products,

apparel and garments, gems and jewelry, and petroleum products.
 This year agriculture sector too had recorded its highest-ever export during 2021-22 with the
export of rice, marine products, wheat, spices, and sugar.
 One of the primary reasons for the huge leap in exports is a rise in pent-up demand, which had
fallen as the Covid-19 pandemic forced nations to remain under strict lockdown, thereby
impacting global trade.
 Production-liked incentive (PLI) schemes by the Government of India and the implementation of
some interim trade pacts with friendly countries have also led to a surge in exports .
  The Central government implemented steps to promote exports of both goods & services &
including the introduction of Refund of Duties and Taxes on Exported Products (RoDTEP) and
Rebate of State and Central Levies and Taxes (RoSCTL) Schemes.

External factors which led to the rise in exports:

 One of the most prominent factors leading the surge in exports is pent-up demand that was not
met during the major waves of the Covid-19.
 Expansionary monetary policy by developed economies in counter to the economic impact of
the pandemic has also increased the demand for Indian products.

Importance of Exports in a Country’s Economy

 Export is one of the primary drivers of growth for any nation.

 It influences a country’s GDP, exchange rate, inflation rate, as well as interest rates.
 A robust export data helps to increase job opportunities and job creation, raises forex reserves, boosts
manufacturing units, and adds to the government’s revenue collection.
 Antidote for countries to come out of recession
 Export will boost the vision of Self- reliant India.
 Make in India Brand will shine with more exports.

HOW TO EXPORT IN INDIA

India’s Foreign Trade is regulated by the Foreign Trade Policy notified by the Central Government in the exercise of
powers conferred by section 5 of the foreign trade (Development and Regulation) Act 1992.

STARTING EXPORTS

To begin an export business, the following steps are required to be followed

1) Establishing an Organization

In order to start the export business, first, a Sole Proprietary / Partnership firm/Company has to be set up as
per procedure with a name & logo.

2) Opening a Bank Account

A current account with an authorized bank to deal in Foreign Exchange should be opened.

3) Obtaining Permanent Account Number (PAN)

Compulsory for every exporter & importer to obtain a PAN from the IT Department.

4) Obtaining Importer-Exporter Code (IEC) Number

As per FTP, it is compulsory to get IEC for export/import from India.

5) Registration cum membership certificate (RCMC)

In order to get a license to import/ export or any other benefit under FTP 2015-20, is needed to get RCMC
granted by the concerned Export Promotion Councils/ FIEO/Commodity Boards/ Authorities.

6) Select product

All items can be exported except a few that are on the restricted list.

7) Market Identification

An overseas market should be selected after thorough research by analyzing market size, competition,
quality requirements, payment terms, etc.

8) Finding prospective Buyers

Identifying the customers through trade fairs, exhibitions, B2B portals, etc. Seeking Help from an Indian
mission abroad can also be useful.

9) Sampling

Giving samples in order to give an idea of the product so that an export order can be created.

10) Pricing/Costing

MRP is important in attracting buyers. The price should be fixed keeping In mind the various factors like
purchasing power parity, competitor price, etc.

11) Negotiation with Buyers

After determining the buyer’s interest in the product, future prospects, and continuity in business, demand
for giving a reasonable allowance/discount in price may be considered. 

12) Covering Risks through ECGC

International trade involves payment risks due to buyer/ Country insolvency. These risks can be covered by
an appropriate Policy from Export Credit Guarantee Corporation Ltd (ECGC)
India’s major exporting Destination
  The merchandise imports have grown rapidly reaching $550 billion.
 Record import of crude oil, coal, gold, electronics, and chemicals ( API) from China for
manufacturing of medicines
 Increase in the price of crude oil due to Russia’s invasion of Ukraine and coal has played a
significant role in adding to India’s import bill and taking the trade deficit for the first 11 months
to a record high of US $176 billion.

Foreign Trade Policy of India

 It Highlights the government schemes and initiatives to encourage indigenous production and
exports to drive economic growth.

 It is notified for five years.

  This policy is updated every year on March 31, and the relevant changes come into effect
from April 1.
 India’s Foreign Trade Policy aims at helping exporters to get the benefits of GST, closely
monitoring export performances, improving ease of trading across borders, increasing realization
of India’s agriculture-based exports, and promoting exports from MSMEs and labor-intensive
sectors.

 The government is hoping to increase exports from a new set of promising product groups like
defense equipment, medical devices, agro-processing, technical textiles, and chemicals.

Major initiatives under the Foreign Trade Policy

1. Niryat Bandhu Scheme

2. Duty-Free Import Authorisation (DFIA)
3. Export Promotion Capital Goods (EPCG)
4. Electronic Import exporter code (IEC)
5. Electronic Bank Certificate (e-BRC)
6. Exporter Importer Profile
7. Online Filing of Applications
8. Withdrawal of Seizure of Export-Related Stock
9. Round-the-Clock Customs Clearance
10. Single Window Interface
11. Facilitating Export of Perishable Export Products
12. Time Release Study
13. Towns of Export Excellence
Expectations from Foreign Trade Policy:

1. WTO-compliant tax incentive

2. Ease in credit
3. Better Infrastructure
4. More support instead of subsidy
5. Change in Tax slab
6. Digitalization and scope of e-commerce
7. Awareness of Export
8. Import Wishlist