India’s exports - estimated at $ 767 billion - for FY 2022-23 recorded a rise of 14.5 per cent over FY22’s $ 669.65 billion. Growth is commendable against the backdrop of slowdown witnessed in the global economy due to issues such as Russia-Ukraine war, surging raw materials & energy prices. While India’s merchandise exports grew 6 per cent from $ 422 billion (in FY22) to $ 447 billion (in FY23), services exports showed robust growth of 30 per cent reaching $ 320 billion in FY23.

With India looking to rev up its global play, the government recently unveiled the Foreign Trade Policy 2023 (FTP 2023) with an aim to achieve exports of $ 2 trillion by 2030 (with goods & services making equal contribution of $ 1 trillion). FTP makes it clear that India's exports will hinge on the strength of its competitiveness and not on subsidy doles. To raise the efficiency and boost production, Indian companies have been moving toward a more automated and process-driven manufacturing.

Thanks to government initiatives like the National Manufacturing Policy, which aims to raise manufacturing's GDP share to 25 per cent by 2025, and the Production Linked Incentive (PLI) scheme, India's core sectors are at par with international manufacturing standards. In 2022’s World Competitiveness Index (released by the Institute of Management Development), India was ranked at the 37th position across the globe (compared to 43rd position previous year). This is the highest jump among all of the Asian economies.

Assuming a 7-8 percent real GDP growth over the next seven years, India’s GDP will reach $ 7.3 trillion by 2030. During this period, as per FTP2023 document, India's exports are expected to grow from $ 767 billion to $ 2 trillion. If this target is achieved, then exports share as a percentage of GDP will also increase from 23 percent to 27 percent - which will be near to the global average of 28.9 per cent and very high compared to developed countries like the US (10.9 per cent), China (20 per cent), and Japan (18.4 percent). Germany is the outlier with 47.0 percent.

India's manufacturing sector represents one of the biggest opportunities to spur economic growth and job creation. To further boost manufacturing, the Government of India (GoI) introduced the Production-Linked Incentive (PLI) scheme in 2020 with an allocation of Rs 1.97 trillion ($ 27.02 billion) to create global manufacturing champions in 13 sectors (starting FY22). Investments worth Rs 3.5 trillion are expected to be made during FY23 to FY26. Thanks to PLI scheme and the healthy economic growth, India received its highest-ever Foreign Direct Investment (FDI) of $ 84.84 billion in 2021-22 – showcasing the confidence of overseas investors in the country.

Given India's growth aspirations to reach $ 35-40 trillion by 2047 and the government's policy to encourage investments for developing modern infrastructure, India is well poised to become the most sought-after manufacturing destination in the world. Clearly, India is a market to be in – currently and in the future.

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