Indian Industry’s internationalisation journey since Independence has traversed several peaks and troughs. As a new nation took shape, the years after 1947 necessitated import and export controls and strict conservation of foreign exchange. While joint ventures with foreign companies for technology transfer were set up in the country, Indian companies also ventured overseas in limited numbers over the decades. The economic reforms since 1991 dismantled the tariff barriers gradually and, as overseas companies entered the economy, the number of Indian companies engaging overseas also went up.
It was 2003-04 when India’s goods exports crossed the milestone of USD 50 billion and software services exports started gaining traction. Since then, we have reached a peak of USD 422 billion for goods exports and USD 254 billion in services exports in FY22, which has buoyed our confidence on internationalisation. FDI inflows of USD 83.6 billion also stood at a high.
As we celebrate 75 years of freedom, India finds itself in a world of geopolitical flux and challenges of climate change and technological advance. The ongoing shift in the global economic centre of gravity towards the East presents unique opportunities for India to position itself as a global leader with a long-term vision towards 2047, India’s centenary of Independence.
Setting its sights on these new horizons, Indian Industry must engage outwards forcefully. It must strategize to position itself into global value chains, which account for over 70% of global trade. This will entail constant effort towards building competitiveness and scaling up technology adoption, particularly for smaller enterprises. Services exports are a huge area of opportunity for an Indian workforce that is embracing digitalisation and is aligning to global skill requirements.
India’s push for FTAs, including both goods and services, is a welcome move that will create long term partnerships. FTAs with UAE and Mauritius are already being implemented and a beginning has been made with Australia. India is negotiating FTAs with several other countries and regions such as the UK, the EU, and Canada which are expected to be concluded over a couple of years. All these will set a new foundation for internationalisation of Indian Industry.
CII has set a target of USD 1 trillion in merchandise exports and USD 1 trillion of services exports by 2030 and has outlined a policy framework to achieve this. The strategy would be to build domestic competitiveness through a range of measures on the one hand, while working with different countries and regions to open market access and facilitate Indian business engagement.
An overarching National Export Promotion Council is suggested which will work with concerned ministries and state governments towards building export competitiveness. FTA facilitation centres, standards and certification facilities, export promotion offices overseas, and export training centres across the country are recommended to support the internationalisation effort.
As per a visioning exercise by CII for 2047, export targets have been outlined for various sectors. For example, we can look at annual exports of USD 360 billion for the automobile sector, US$ 300 billion for the auto component sector, and textiles at USD 350 billion.
Over the years, CII has built strong and vital partnerships with governments, industry, academia and other stakeholders across the world. Its outward and inward business delegations enable new ventures and the digital route for engaging overseas would catalyze new interactions. CII holds a number of trade exhibitions with overseas participation and also organizes India’s participation in such shows in other countries. The various business leaders’ forums with different countries facilitate direct engagement.
Over the next 25 years, CII’s international activities will only expand and intensify, helping industry to become a vital player in global trade and investment. As we celebrate India@75 and our achievements as a nation, this is a moment for all stakeholders to aspire to a new trajectory of internationalisation in the journey towards India@100.
This article was contributed by Mr Vir Advani, Chairman, CII International & Trade Policy Council and Vice Chairman & MD, Blue Star Ltd and was first published in CII Communiqué, August 2022 issue.