PwC India launches VIKSIT framework to propel India towards achieving the goal of USD 1 trillion in merchandise exports
Mumbai, 9 August 2024: From an Atmanirbhar Bharat to a Viksit Bharat, India is taking rapid strides to move up the growth trajectory. The Government of India has set an ambitious target of achieving USD 1 trillion in merchandise exports by FY30.
Against this backdrop, PwC India unveiled its report, ’VIKSIT: An approach for India to achieve USD 1 trillion exports’, which outlines a strategic framework to elevate India's export capabilities and drive sustainable growth. Aligned with PwC's approach of building sustained outcomes, the framework hinges on actionable insights that will contribute to India's long-term economic success. The report was launched by the Hon’ble Union Minister of Commerce and Industry, Shri Piyush Goyal, in New Delhi last evening.
At the launch, Sanjeev Krishan, Chairperson, PwC in India, commented, ‘India's rise to becoming the fifth largest global economy is mirrored by its increasing share in global trade, driven by a focus on export-led growth. We're excited to introduce the VIKSIT framework, a strategic initiative designed by PwC to leverage the nation’s strengths and address key infrastructural and technological impediments to boost the country’s export potential. The framework can be leveraged over the coming years to enable a continuous dialogue on enabling competitiveness across the government and the private sector”.
The report emphasises the critical role of public and private sector interventions towards creating a robust export ecosystem in the journey towards USD 1 trillion merchandise exports. The Government has a significant role to play in the creation of an enabling ecosystem and the VIKSIT framework offers strategic guidance to various government bodies to resolve bottlenecks and drive export growth across key sectors such as automobiles, electronics and food processing.
The report details how VIKSIT’s pillars — V focusing on value addition and volume growth in exports by identifying priority products and industries, I standing for infrastructure investments; K for knowledge sharing and capacity building, S for sustainable supply chain, I for inclusive industrialisation focused on MSMEs and T denoting technology enablement — have the potential to uncover new sector-specific opportunities to help achieve India's export ambitions.
This report serves as a strategic blueprint for driving India’s export growth, offering a detailed roadmap with crucial steps to engage MSMEs, industry players and infrastructure developers, while ensuring long-term sustainability. “Currently, just ~1.36% of India’s registered MSMEs are exporting, revealing a gap between export growth and MSME internationalisation. Challenges such as the business environment, export procedures, finance access and market information hinder MSME exports and must be addressed to unlock India’s path to achieving USD 1 trillion in merchandise exports”, added Krishan.
As per the report, there are five considerations that need to be weighed in while charting India’s export growth journey. While adding scale, India’s manufacturing sector also needs to improve its value addition ratio to prevent commoditisation of the export basket and ensure that exports move towards high value-adding and emerging segments. In addition to product diversification, the report emphasises the criticality of expanding India’s geographic market access to mitigate market concentration. It exhorts the need for the country to pursue a trade strategy to position Indian products competitively while reducing the burden of compliance and non-tariff barriers (NTB) conformity.
Talking of challenges that exist, Krishan highlighted a crucial point where he mentioned, “Readiness to address the implications of climate change and recent mitigation measures will impact international trade. Both pricing and non-pricing policies for climate mitigation have accelerated during the last 10 years. Since these policies and initiatives will impact both access and competitiveness, exporters across the globe will need to reflect on decarbonisation within their respective value chains.”
The report underscores the vital role of technology in driving export efficiency, product quality and unit production. Advanced technology adoption in the Indian manufacturing and export sectors has been relatively slow, impacting the ability to cater to international market trends and demand. Considering the growth in containerised traffic owing to exports growth, the report recommends port authorities to envisage both capacity expansion and technology-led customs process enhancement.
Amongst its many action-oriented recommendations, the VIKSIT framework advises a technology driven pathway for the automobile sector wherein OEMs lead the enablement of the entire supply chain by integrating tier-2 and tier-3 manufacturers. It emphasises that electronics export growth should be driven by backward integration in manufacturing to improve value addition and scale expansion simultaneously. Access to capital, skills and innovation will be required to build sector capabilities. For food processing, it will be crucial to move up from primary processing to cater to the demand for secondary and above, and diversify towards convenience with ready to eat/cook alternatives while ensuring alignment with global food standards.
