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Export sector critical for achieving $5 trillion economy: FIEO

Supply side challenges must be addressed at the earliest to ensure healthy growth in the exports sector. According to the Federation of Indian Export Organisation (FIEO), an 8 per cent growth in the exports is critical to achieve the milestone $ 5 trillion economy.

Export order for food including processed food, pharma, medical and diagnostic products, technical textiles, chemical, plastics, electronics and networking products has shown a marked improvement.

“We should endeavor to take exports to $350 billion in 2021-22..This looks ambitious but definitely achievable, if we address our supply side challenges,” Sharad Kumar Saraf, president, FIEO said in a statement.

The World Trade Organisation (WTO) in its recent forecast projected a 9.2 per cent decline in the volume of world merchandise trade for 2020, followed by a 7.2 per cent rise in 2021.

Saraf said that the focus must be on sectors such as electronics and electricals, machinery, automobile, pharma and medical equipment, accounting for about 40 per cent of global imports, in which India’s current share is less than 0.9 per cent. “It is very satisfying that the Production Linked Incentive (PLI) scheme is rightly focusing on these sectors. Once we create production capabilities in these products, pushing exports at a brisk pace should not be a challenge,” Saraf said.

India must work towards inking free trade agreements (FTAs) with major trade partners including the US, EU and UK to boost exports.

India has not signed any trade agreement since 2012 but is expected to revive talks on the possible FTA with the EU and the US. Even as New Delhi opted out of the Regional Comprehensive Economic Partnership (RCEP), it is keen on inking trade deals with other economic blocs, a highly placed source said, adding that India could gain significantly amid a growing anti-China sentiment in many parts of the world.

The EU is India's largest trading partner accounting for 11.1 per cent of total Indian trade, on par with the US and ahead of China (10.7 per cent).