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    Exporters want Budget to aggressively create Brand India tag for certain products

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    Story outline

    • Besides Omicron, exporters also had to contend with an acute container shortage following the virus outbreak.
    • This led to delays in shipments and a longer wait time at ports.
    • Despite such factors, exports have shown resilience in this financial year.
    Budget 2022 should also factor in measures that would help in diversifying India’s export basket as well as make them more competitive in the long run.
    After facing a rather dismal year in 2020 following the outbreak of the coronavirus, exporters saw a positive momentum build-up in 2021 as the month-on-month performance showed a reason to cheer.

    The country’s exports in December alone showed an impressive feat — at $37.81 billion — on account of sectors such as engineering, textiles, organic and inorganic chemicals and gems and jewellery showing an upward trend. This was the highest-ever monthly achievement, indicating an increase of 37.0% over $27.22 billion in December 2020, according to the Press Information Bureau (PIB).

    With India achieving $300 billion in merchandise exports from April-December 2021, it meant that the goal of $400 billion in exports seems within reach in this financial year. Commerce and Industry Minister Piyush Goyal said a much higher goods exports target can be set in the last quarter of this FY. “In December alone, we touched $37-billion goods exports despite the Omicron fear factor weighing high. This month, in 15 days till January 15th, we have reached $16 billion,” the minister stated earlier in January.
    Exports of Top 10 Major Commodity Groups@2x
    Besides Omicron, exporters also had to contend with an acute container shortage following the virus outbreak, which led to delays in shipments and a longer wait time at ports. Despite such factors, exports have shown resilience in this financial year. A glance at the top 10 major commodity groups, covering 79% of exports, reveals that engineering goods, petroleum products, gems and jewellery, organic and inorganic chemicals, drugs and pharmaceuticals and electronic goods were among the product categories that showed positive growth in December 2021.
    What can Budget 2022 encompass to scale up such categories further?
    Mahavir Pratap Sharma, Past Chairman, Carpet Export Promotion Council (CEPC), says the government needs to chalk out an aggressive strategy for marketing and branding of such products. “They need to aggressively create a Brand India tag and choose products that no one can compete with. Besides Europe and America, we also need to make inroads into places in South America and Russia, for instance,” he asserts.

    Government needs to spell out long-term incentives in Budget 2022: Exporters

    How will FY 22 be for the exports sector after a good run in the previous fiscal? Can Budget 2022 provide the necessary impetus to carry the momentum? What are the pain-points that the sector wants the FM to address? Exporters answer all this and more in this ET Rise panel discussion. Watch
    Sharma substantiates his point by giving the example of tourism. “When India promotes tourism, it promotes India — and multiple industries benefit from this as well. The government should do the same by focusing on specific categories — with short videos — to show India as a world leader in these categories. This will also spur investment.” Besides this, Sharma adds that target-based incentives, lower interest rates and tax incentives can also play their part in pushing such product categories forward.

    Other industry experts are of the view that the benefits of the Production Linked Incentive (PLI) scheme will help in its own way to promote certain sectors. “A lot depends on the success of the scheme for certain categories to grow further,” says MS Mani, Partner, Deloitte India. “The scheme focuses on areas where we still have to make a dent; for example, semiconductors, television screens, mobile phones, etc. Such categories are expected to see a pickup in the times to come.”

    While not mentioning any specific sectors, Mani predicts some change in India’s export basket in the next few years. “When we look at product merchandise exports, there is not too much that the Budget can do as these are governed largely by our Foreign Trade Policy. However, export competitiveness will certainly find a mention. Also, we anticipate changes in the country’s export basket with a lot of electronic exports from India, including mobile phones, components and chargers, as well as in automobiles and auto components,” he says.

    The PLI scheme was announced for 13 key sectors in the Union Budget last year with an outlay of Rs 1.97 lakh crore. With sectors such as electronics, white goods, high efficiency solar PV modules and automobiles and auto components included in PLI, the scheme’s objective has been to create global champions in manufacturing.

    Affirming Mani’s views, Ajay Sahai, DG & CEO, Federation of Indian Export Organisations, says that categories such as engineering goods and electronics are here to stay for long. “The PLI scheme will also start unfolding. We will build on that,” he says.

    Sahai is of the view that announcements are likely to come up in sectors such as agriculture, textile and leather, which are also highly labour intensive. “More financial incentives and a duty correction is possible in these sectors as prices of inputs have gone up. Cotton prices have also spiked. There could also be a larger strategy to promote certain districts as export hubs. We are also hoping for some focus on R&D spends as it is the key to export sustenance,” he adds.

    Given how integral exports are to India’s plan of becoming a $5-trillion economy by 2025, a concerted effort to keep the growth rate up and steady is crucial. Budget 2022 should also factor in measures that would help in diversifying India’s export basket as well as make them more competitive in the long run.

    (Illustration by Sadhana Saxena)
    ( Originally published on Jan 25, 2022 )
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