In the early 1990s, India made a significant shift away from the principles of self-sufficiency that had been guiding its policies since gaining independence. Subsidies were eliminated, and import levies were reduced, leading to a sharp decline in average tariffs. The average tariff fell to 13% by 2014, a significant decrease from the 125% seen in 1991. This reduction in trade barriers had a significant impact on India’s export market, with exports experiencing a significant increase during this period.
Despite the growth in exports, Prime Minister Narendra Modi has expressed a desire for a more balanced export portfolio. India, known as a services superpower, has not made significant inroads into global manufacturing supply chains for products such as generic drugs and phones. This has resulted in the country’s share of global goods exports remaining stagnant at around 1.8% over the past decade. Prime Minister Modi is looking to address this imbalance and increase India’s presence in global manufacturing supply chains.
The shift away from swadeshi principles has allowed India to become a more open economy, attracting foreign investment and fostering economic growth. However, there is still room for improvement in terms of diversifying India’s export market and increasing its role in global manufacturing supply chains. With Prime Minister Modi likely to secure a third term, there may be further policy changes aimed at achieving these goals.
In conclusion, India has made significant progress in terms of liberalizing its economy and increasing its exports. However, there remains a need for greater diversification in the country’s export portfolio and a more prominent role in global manufacturing supply chains. With the upcoming elections and Prime Minister Modi’s likely reelection, there may be further initiatives to address these challenges and boost India’s presence in the global market. Stay tuned for updates on India’s export policy and initiatives under Prime Minister Modi’s leadership.
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