States Challenges in Exports at the Board of Trade meeting

Syllabus: GS3/Economy

Context

• Many challenges were flagged by exporters in a meeting of the Board of Trade (BoT) chaired by the Union Commerce and Industry Minister.

About

• The BoT meeting happened in the backdrop of slowing exports due to the steep US tariffs of 50% as both countries failed to conclude a trade deal.
  • In the Board of Trade meeting, representatives from states and the industry, as well as key Central minis­tries, provide the Commerce Ministry with specific inputs to boost exports and trade.
• Concerns Raised by Exporters:
  • Costlier raw materials, shortage of testing facilities to ensure products meet global quality standards, and lack of adequate shipping containers are all leading to loss of competitiveness of goods exports.
  • The steep US tariffs have dampened exports, and have triggered cancellations in orders and delayed payment. 
  • There are also worries that these could result in orders moving to its competitors such as Bangladesh, Vietnam and China.

Exports by India

• Exports account for nearly 21% of GDP and robust  foreign exchange inflows for India. 
• Over 45 million people being directly and indirectly employed under the export oriented industries, the MSMEs contribute nearly 45% of total exports. 
• Key export drivers during April-September 2025 include Electronic Goods (41.94%), Engineering Goods (5.35%), Drugs and Pharmaceuticals (6.46%), Marine products (17.40%) and Rice (10.02%).
• Major export destinations include the USA (13.34%), United Arab Emirates (9.34%), China (21.85%), Spain (40.30%), and Hong Kong (23.53%).
• Such sustained export growth has been instrumental in supporting India’s current account balance and macroeconomic stability.

Government Initiatives to Curb these Challenges

• Export Promotion Mission: In the Union Budget for 2025-26, the Finance Minister announced an Export Promotion Mission.
  • It would facilitate easy access to export credit, cross-border factoring support, and support to MSMEs to tackle non-tariff measures in overseas markets.
  • EPM will span six years covering FY 2025-26 to FY 2030-31.
  • Under EPM, priority support will be extended to sectors impacted by recent global tariff escalations, such as textiles, leather, gems & jewellery, engineering goods, and marine products.
• Export Support Package: The government announced a Rs 7,295-crore export support package, comprising a Rs 5,181-crore interest subvention scheme along with a Rs 2,114-crore collateral support, to improve exporters’ access to credit.
• Free Trade Agreements (FTA) Negotiations: India is aggressively pushing for newer markets and has signed as many as three free trade agreements, with Oman, New Zealand and the UK, in 2025.

• Digital Transformation: The Department of Commerce has advanced its Digital Transformation agenda to strengthen trade facilitation and intelligence through data-driven solutions.
  • Initiatives such as Trade eConnect and Trade Intelligence & Analytics (TIA) portal lay a strong foundation for evidence-based decision-making.

Conclusion

• The Indian government’s comprehensive strategy aims to reinforce the resilience of its exporters amid challenging global trade dynamics. 
• Sustained efforts will be essential to protect traditional export sectors and ensure long-term competitiveness against both US tariffs and Chinese market strategies.

Source: IE