Promising the nation’s exporters an uplifting vision for the future, PwC India suggests a strategic ‘Viksit Framework’ to attain I trillion exports by FY29.
A goal of achieving $1 trillion in merchandise exports is needled while aiming to achieve the target of FY 29 and PwC India has indicated the same. The consulting firm outlines a clear pathway to this ambitious goal in its latest report, “VIKSIT: Notably, this strategic blueprint is titled “India’s Roadmap to $1 Trillion Exports: An Approach,” and it arrives at the right time since the export market in India is experiencing some hurdles, and these include:_lens span-significant geopolitical risks, the existing inherent global risks of the trade and many more.
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The Transformative Strategy amid Global Dynamas
The merchandise exports of India further declined in FY24 to $437 billion compared to $451 billion in FY23 with the worst stereotyping in textiles and garments. Still, sectors like electronics have taken something positive, although the value addition is almost negligible. The optimistic scenarios assume growth in exports could remain at a healthy 18 percent for the country to cross the $1 trillion mark by FY29, says PwC India. However, this forecast has been made based on assumptions made which include: geopolitical risks have been solved or controlled, India has embarked on a process and making strategic interventions that can make its exports more competitive in the global markets.
The 'Viksit' Framework: Success of the Outputs/Activities: A Roadmap
The VIKSIT framework of PwC India contains a strategy for the country to work towards reviving its export base. The framework outlines three potential scenarios: an “optimistic” plan that aims at achieving 18 percent growth annually, and a “reference” plan with 14 percent growth annually. A basic scenario assumes of 5 percent growth rate, and a conservative scenario assumes 10 percent growth. Even in the best of circumstances namely, India could attain $ 1 trillion by the end of FY 29, and in the other two cases, it expects to realize the same by FY 31 and FY 33, respectively.
Mr Sanjeev Krishan, the chairperson at PwC accused India of not exploiting the results of its increasing presence in international trade. Because of export-oriented development, India has raised its position in international trade, and currently, the fifth largest economy in the world can be appreciated with the help of the VIKSIT framework acting continuously as a dialogue between the government and private sectors to improve competitiveness.
Competitiveness Improvement at the Firm Level
A major finding from the report is the broken link between image and execution or moving from branding the external environment to actionable steps at the operational level. One might see a ridiculously comparing representation of India with other developed or even emergent countries during the international traders’ fairs. Thus, to be able to compete effectively in the world market, sustained improvement of the country’s image as well as the distinctiveness of the products must be achieved.
Krishan pointed out that India has the core building blocks of the new age economy like the developments in energy, semiconductors, EVs, and battery storage; but to get there, it has to sort out the above micro-level issues to realize a $1 trillion opportunity. “The foundation has been laid, but now, these seeds have to grow by enhancing the overall mechanism of exports from the grassroots level”.
According to him, this new and unique departure in the approach towards export promotion is the primary reason behind the formation of these associations.
Tackling Key Areas of Development
Five strategic development clusters have been defined in the report and are seen as imperative to drive India’s export growth. The value addition ratio is one area of grave concern for India’s manufacturing industry to boost in the future. This step is necessary to ensure that the export basket of India does not turn into a low-end one and the export movement is toward high-added value segments.
However, to avoid the problems connected with the high level of market concentration, one has to pay special attention to product diversification and increasing access to new markets. According to PwC India, further progressing with renewed FTAs will lead to offering better placement of Indian products on the international market, along with also easing compliance and aligning them with non-tariff barriers, NTOs.
Building the Capacity of MSMEs for Export Performance
MSMEs form a strong value chain in Indian exports; however, their credit outreach is limited to around one-tenth of a percent. Exporting is another area of operation among the MSMEs where about 36 percent of the firms are involved. The following are the four problem areas identified in the report that restrict MSMEs from exploiting global opportunities: business environment, export formalities, financing, and information. These challenges will have to be ironed out to realize the export envy that this sector holds.
Technology in the efficiency of export business
The report also stresses the need for mastering innovative technologies that can help improve export effectiveness, the quality of produced items, as well as the unique production rate. The slow rate of technology implementation has been a major factor that has denied India a chance to conform to the international markets. Consequently, for Indian manufacturing and export industries to remain relevant, they need to assimilate new technologies at an even faster pace.
Optimisation of infrastructural developments and interaction with customs services
There have been improvements in the ports especially in India hence lowering the TAT of the cargo. However, improvements are still needed. Based on 2023 projections, the containerized cargo ports took an average time of 156 hours to complete the turnover while on average, 19 hours were spent on customs. Container depots in inland locations’ average turnaround time was 128 hours; of which 32 hours were spent on customs formalities.
Krishan also added that where there is container throughput, port authorities have to work on capacity aspects and automate customs procedures. Also, improvements in the facilities for storage and warehousing at the seaports and airports contributed to the decrease in logistics costs considerably.
Outlining a New Perspective for India’s Production Linked Incentive (PLI) Programme
The same was proposed for reconsideration of the Policy to promote Goods Manufacturing through the Production-Linked Incentive (PLI) Scheme of export-oriented industries. However, the PLI has worked in cases of electronics, but it has not brought substantial results in the new emerging technologies like EVs and Batteries. Therefore, Krishan has said the PLI scheme should be modified in such a way so that other sectors can get its advantage and there can be an increase in the exports of India.
Conclusion: An Imperative Guide for Strategic Management
PwC India has strategically mapped its Viksit framework to help India realize the dream of $1 trillion in exports by FY29. Thus, there is a range of issues that India has to solve and leverage to become a world leader in trade. Getting to $1 trillion is a bold goal and achievable if it is accompanied by clear planning, the implementation of selective changes, and insistence on a systematic improvement of competitiveness throughout the system.
