Why in News?
- Recently, The Department of Commerce, Government of India, has implemented the Trade Infrastructure for Export Scheme (TIES) to ease the growth of exports by building appropriate infrastructure.
About TIES Scheme-
- The TIES scheme gives grants-in-aid to central and state government-owned agencies or their joint ventures for infrastructure projects with significant export linkages.
- The infrastructure involves Border Haats, Land customs stations, quality testing and certification labs, cold chains, trade promotion centres, export warehousing and packaging, Special Economic Zones (SEZs), and ports/airports cargo terminuses.
- Objective- To improve export competitiveness by bridging gaps in export infrastructure, developing focused export infrastructure and first-mile and last-mile connectivity.
- Nodal Ministry- The Department of Commerce under Ministry of Commerce and Industry is implementing the scheme w.e.f. FY 2017-18 to support Central and State Government agencies in creating appropriate infrastructure for the growth of exports.
Major Government Initiatives to Promote Export Growth-
- PM Gati Shakti National Master Plan (NMP)-
- The PM Gati Shakti NMP is a digital platform that integrates geospatial data related to infrastructure in the country and planning portraits of many ministries/departments of the government.
- This digital system supports in data-based decision-making for the synchronised implementation of infrastructure projects, aiming to decrease logistics costs and support economic activity in the country.
- Duty Drawback Scheme- The Duty Drawback Scheme rebates the incidence of customs duties on imported inputs and central excise duties on domestic inputs used in the manufacture of export goods.
- This scheme is operated in terms of provisions of the Customs Act, 1962, read with the Customs and Central Excise Duties Drawback Rules, 2017.
Several Challenges Related to Indian Export Growth-
- Rising Protectionism and De-globalisation- Currently, Countries around the globe are moving towards protectionist trade policies due to disrupted global political order (Russia-Ukraine War) and weaponization of supply chain, that is in way lessening India’s export capacities.
- Lack of Basic Infrastructure- India’s manufacturing sector lacks adequate manufacturing hubs, internet facilities and transportation are costly when compared to developed nations which is a huge discouragement to Industries.
- India uses only 4.3% of its GDP for infrastructure construction each year, as compared to China’s 20% of its GDP. For infrastructure, Rs 10 lakh crore (3.3% of GDP) was allotted in the budget 2023-24, an increase of three times from 2019.
- Uninterrupted power supply is also a challenge.
- Lack of Innovation Due to Low Spending On R&D- At present, India spends about 0.7% of GDP on research and development. This stops the manufacturing sector from evolving, innovating and growing.
Way Forward-
- Filling Up Infrastructural Gaps- A strong infrastructure network- warehouses, ports, testing labs, certification centres, etc. will assist Indian exporters compete in the global market.
- It also requires adopting modern trade practices that can be implemented through the digitisation of export processes. This will save both time and cost.
- Exploring Joint Development Programmes- Amidst a wave of de-globalisation and slowing growth, exports cannot be the single engine of growth.
- India can also explore joint development programmes with other countries in sectors such as space, semiconductor, solar energy to enhance India’s medium-term growth prospects.
- Front lining MSME Sector- At present, MSMEs contribute to one-third of the country’s GDP, account for 48 percent of exports making them major players in accomplishing ambitious export targets.
- It is important for India to link Special Economic Zones (SEZs) with the MSME sector and incentivize small businesses.