India needs to adopt a multidimensional approach to take the country's merchandise exports to $1 trillion by 2030, a report by industry body Confederation Of Indian Industry (CII) has suggested.
The report recommends finalising free trade agreements with large markets, extending RoDTEP to all exports, attracting global firms and addressing domestic manufacturing issues to achieve the target.
"With a holistic and aggressive approach, the aim to achieve $1 trillion in merchandise exports by 2030 is indeed achievable if India undertakes a strategic mission," CII President T V Narendran said.
In its report 'Achieving $1 trillion in merchandise exports: A Roadmap', released on Sunday, the CII has outlined products and destination markets that India should focus on and highlights a range of policy actions towards meeting the target.
The need of the hour is for India to integrate closely with global value chains and to attract FDI inflows in its key sectors, according to the CII.
Based on the potential to gain global share, 14 products have been identified in the CII report as those which can contribute the most to the increase in exports.
These include vehicles, textiles, electrical machinery and equipment, machinery, apparel, chemical products, plastics, pharmaceuticals, etc.
The report also identifies 41 countries that offer opportunities to expand exports which must be given special attention.
"Currently, more than 20 trade deals are under negotiation including those with the UK, Canada, European Union (EU), Australia, United Arab Emirates, and the GCC countries which must be expedited".
Further, non-tariff barriers in existing trade agreements need to be resolved to open market access, says the CII report.
It also highlights the need for investment agreements to be well linked to trade arrangements.
As investment-led exports are a key feature of export capabilities, multinational companies must be encouraged to set up a production base in India to enhance the country's presence in global value chains, says the report.
The rates under the scheme of Remission of Duties and Taxes on Exported Products (RoDTEP) need to be extended to all sectors and aligned to taxes and additional costs that are present in the manufacturing ecosystem, according to the report.
Exports of SEZs and EOUs should be included in the scheme, it added.
It outlines numerous recommendations to improve the efficiency and effectiveness of the Advance Pricing Agreement program and resolve transfer pricing issues, reduce litigation and provide tax certainty for MNCs
Creating a special window 'Accelerated APA' similar to 'Vivad se Vishwas' scheme would help address pending cases, said CII.
The report also recommends that India should set up a dedicated internationally recognised marketing agency for export promotion in key markets.
The agency should have offices in key markets and help with connecting buyers with Indian enterprises, especially small and medium enterprises (MSME).
In January-December 2021, India's merchandise exports crossed $292 billion, a growth rate of 43 per cent over the previous year. The top products adding to export growth include iron and steel, mineral fuels, cotton, aluminium, vehicles, textiles, electrical machinery and equipment and cereals, amongst others.
With such growth and the government and industry working in tandem, the export endeavour can be strengthened to make India a global manufacturing powerhouse for the world, the CII said.