Editorial     

Published: April 30, 2025
Updated: April 30, 2025

Make US tariff pause our export opportunity

After sending shock waves to all trading partners of the US, including India, by an nouncing reciprocal tariffs, President Donald Trump has postponed the implementation of his plan for 90 days. India should utilise this 3-month gap to seal an India-US trade deal which can soften the blow of the tariff war on India. Otherwise, this will adversely hit our export earnings. Michael Kugelman, a noted South Asia analyst, has rightly said that even Mr Modi’s ‘rapport’ with Mr Trump could not shield India from the tariff storm which has exposed our trade vulnerabilities.

After all, the Modi government’s performance on the export front during the last 10 years has been far from inspiring. In 2015, one year after coming to power, the government had aimed to increase India’s exports of merchandise and services from $ 465.9 billion in fiscal 2014 to approximately $ 900 billion by fiscal 2020, and to raise India’s share in world exports from 2 per cent to 3.5 per cent. What is more, the government had talked of achieving exports worth $ 2 trillion by 2030.

Unfortunately, even in the current fiscal 2025, Indian exports have not reached the target of $ 900 billion. According to the latest official reports, India’s exports of goods and services have reached $ 82.93 billion in fiscal 2024 -25. Of course, this indicates a 6 per cent rise over the previous year despite global economic uncertainties and trade tensions, but it still falls far short of the $ 900 billion target.

After former Finance Minister Dr Manmohan Singh opened up the Indian economy in 1991, India has been on the growth path. Even during the recent era of global eco nomic uncertainties and geopolitical tensions, India has emerged as one of the fastest growing economies in the world and has demonstrated remarkable flexibility and adapt ability. During the last few decades, India has established a firm position in the global economy by leveraging its demographic benefits, thereby boosting its entrepreneurship culture and technological growth. The country has successfully transitioned from being an agriculture-driven economy to an industrial and service-oriented one, displaying growth in several key sectors.

However, the export performance of the country is far from inspiring. According to the World Bank, India’s exports of goods and services as a percentage of GDP has not even doubled during the last 25 years. In fiscal 2000, this percentage was 13 per cent, reached 21 per cent by 2023, and has not reached 26 per cent by 2025. After all, exports play a crucial role in overall growth as they contribute massively to the GDP of the country. What is more, enhancement of the export sector improves foreign ex change reserves, stabilises the national currency and aids the financial health of the country.

Admittedly, the Modi government has devised certain strategies which are worth prais ing. For example, strategies like ‘Make in India’ and ‘Atmanirbhar Bharat’ are highly impres sive, but they have not been able to yield extra-ordinary results as they lack effective imple mentation. Little wonder, today India has to depend on large-scale imports from China and the Indian economy is China-nirbhar to a great extent.

How can we achieve the target of $ 2 trillion in exports by 2030 in these circumstances? The answer could be given by a school boy: In order to achieve this target, it is vital to focus on certain sectors that possess significant export potential and drive exports.