India believes it can almost triple its annual exports to $2tn annually by capitalising on companies looking to diversify sourcing out of China.
Commerce minister Piyush Goyal said: “We will achieve $2tn in exports by 2030, but we should ensure merchandise exports don’t fall behind services exports.”
India is seeking to channel much of its new economic growth towards manufacturing rather than services. Services have recently seen strong growth due to multinationals outsourcing back office functions to India.
However, this year India’s overall exports were predicted to hit $770bn – falling short of the previous $900bn target. Goyal blamed the shortfall on “global headwinds”.
He said the ambitious target could be achieved as long as India “explores every possible opportunity”.
“It is better to aim high and miss, than to aim low and to hit… and, of course, what can be better than aim high and achieve,” he added.
India has been pursuing bilateral trade deals with countries including Australia, the UK and Canada
In an interview with the Wall Street Journal, Goyal suggested that even a trade deal with the US might be possible. He said India would “love” to discuss a free-trade agreement with the US – though at present such a deal appears to lack bipartisan support in the US.
Goyal has also told journalists that India’s high tariffs – which aim to protect domestic manufacturers and encourage local production – are aimed at “non-transparent economies” dumping “low-quality, substandard goods at really low prices”.
India is currently the world’s fifth largest economy and is set to overtake the US by 2048, according to the OECD, though the Reserve Bank of India (RBI) deputy governor, Michael Patra, has said he believed India could surpass the US by 2031.
Currently a trade deal with the US lacks political support, but that could change as India’s economy grows and if and when the fruits of trade deals with countries such as Canada and the UK become apparent.
India’s government is hoping to use its G-20 presidency to distinguish itself from the so-called tiger cub economies of south-east Asia.
These countries, which include Vietnam, Malaysia, the Philippines and Indonesia, are competing with India for business from companies looking to diversify manufacturing from China as part of a policy of reshoring or “China plus one”.
Meanwhile, India has also announced plans to relax procurement regulations when purchasing wheat from farmers because of damage to the crop from rainfall and hail in key producing central and northern states, Reuters reported.
Some states in India, the world’s second largest wheat producer, will be allowed to procure at prices outside normal regulations to aid farmers.