Identify the structural weaknesses in India’s export composition. Analyse how these heighten vulnerability to external trade shocks. Suggest long-term measures to diversify and strengthen the export base.
Kartavya Desk Staff
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment
Topic: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment
Q5. Identify the structural weaknesses in India’s export composition. Analyse how these heighten vulnerability to external trade shocks. Suggest long-term measures to diversify and strengthen the export base. (15 M)
Difficulty Level: Medium
Reference: FE
Why the question Due to recent trade disruptions, such as the 50% U.S. tariff hike on Indian exports, which exposed structural vulnerabilities in India’s export composition and its implications for long-term economic goals like Viksit Bharat 2047. Key Demand of the question: The question requires identifying structural flaws in India’s export basket, analysing how these flaws increase exposure to external shocks, and suggesting long-term diversification strategies. Structure of the Answer: Introduction: Mention India’s export profile and its overdependence on a few sectors, highlighting how this affects economic resilience in global trade dynamics. Body: Point out key structural weaknesses in export composition such as low-tech share and concentration in few products or markets. Explain how these weaknesses amplify trade shocks through tariff risks, supply chain disruptions, and demand volatility. Suggest long-term reforms including export diversification, value addition, FTA strategy, and support for MSMEs and services. Conclusion: Summarise the need for recalibrating India’s export strategy to align with sustainable growth and the vision of becoming a $30 trillion economy by 2047.
Why the question Due to recent trade disruptions, such as the 50% U.S. tariff hike on Indian exports, which exposed structural vulnerabilities in India’s export composition and its implications for long-term economic goals like Viksit Bharat 2047.
Key Demand of the question: The question requires identifying structural flaws in India’s export basket, analysing how these flaws increase exposure to external shocks, and suggesting long-term diversification strategies.
Structure of the Answer:
Introduction: Mention India’s export profile and its overdependence on a few sectors, highlighting how this affects economic resilience in global trade dynamics.
• Point out key structural weaknesses in export composition such as low-tech share and concentration in few products or markets.
• Explain how these weaknesses amplify trade shocks through tariff risks, supply chain disruptions, and demand volatility.
• Suggest long-term reforms including export diversification, value addition, FTA strategy, and support for MSMEs and services.
Conclusion: Summarise the need for recalibrating India’s export strategy to align with sustainable growth and the vision of becoming a $30 trillion economy by 2047.