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India Can Double Global Trade Share with MSME Boost and Digital Integration
Team Finance Saathi
19/Dec/2024
What's covered under the Article:
- India aims to double its 2% global trade share by boosting MSME competitiveness and digital integration.
- CII stresses adopting best practices and implementing key regulations like CAARR 2021 to streamline trade processes.
- India’s tax alignment with global standards enhances trade ease with EU and ASEAN partners.
India’s aspiration to expand its global trade share, currently at 2%, received a significant boost with actionable insights provided by the Confederation of Indian Industry (CII). According to the CII, India's share in global trade has the potential to more than double by focusing on micro, small, and medium enterprises (MSMEs), enhancing digital trade infrastructure, and embracing global best practices to reduce trade costs.
MSMEs: The Key to Trade Growth
MSMEs play a pivotal role in India's export ecosystem, contributing substantially to total exports. Strengthening their competitiveness is essential for expanding India's global trade footprint. This can be achieved through targeted policies, financial incentives, and skill development programs aimed at enhancing productivity and innovation in the MSME sector.
To further empower MSMEs, CII Chairperson Mr. Sanjay Budhia emphasised the need for a common online portal to streamline circulars related to ports and locations, which will significantly improve access to critical trade information.
Digital Trade Infrastructure: A Game-Changer
Improving India's digital trade infrastructure is critical for ensuring seamless cross-border transactions. This involves adopting cutting-edge technologies to enhance transparency, reduce paperwork, and streamline logistics processes. Simplified digital platforms can attract global investors and strengthen India's position as a reliable trade partner.
Adopting Best Practices to Cut Trade Costs
CII highlighted the importance of adopting best practices from developed nations to reduce global trade costs. For example:
- Enhancing the Authorised Economic Operator (AEO) programme to reduce delays for exporters.
- Implementing the Customs Authority on Advance Ruling (CAARR) Regulation, 2021, which ensures predictable duty liabilities and boosts exporter confidence.
- Automating refund processes where there is no dispute between the department and the importer, reducing bureaucratic hurdles.
Strengthening International Trade Partnerships
India's alignment of its taxation system with global standards, particularly the VAT-based structures of the European Union (EU) and ASEAN countries, has significantly improved the ease of doing business. This alignment facilitates smoother cross-border transactions, enhancing India's trade ties with these key partners.
Path to Doubling India’s Global Trade Share
For India to achieve its ambitious goal of doubling its global trade share, the following steps are essential:
- Boosting MSME productivity through targeted investments and skill development.
- Enhancing digital trade infrastructure for seamless global integration.
- Adopting global trade cost reduction strategies to make Indian exports more competitive.
The Upcoming IPOs in this week and coming weeks are Ventive Hospitality, Senores Pharmaceuticals, Carraro India, Solar91 Cleantech, Unimech Aerospace, Rosmerta Digital, Indo Farm, and Avanse Financial.
The Current active IPO is Transrail Lighting, Mamata Machinery, DAM Capital Sanathan Textiles, Concord Enviro, Newmalayan Steel, Identical Brain Studios and NACDAC Infrastructure.