The Union Budget is expected to re-energize India’s exports in the upcoming budget on 31st Jan 2020. India’s export growth has been remained constant with $300 billion for the last one decade. The growth has been stuck to 20% India’s export and needs grow more. It is an alarm for government to upgrade and allocate funds to foreign trade policy.
On 5th July 19, finance minister Nirmala Sitharaman presented her first budget. Therefore only one vital word was missing from her 20,189 words speech: EXPORT.
In Budget 2020, Govt. may provide incentives by reducing costs on inputs for exports.
The above pie chart shows details about Budget 2019
Budget 2020 Expected Impact on Import Export & Foreign Trade
- Rise import duties on more than 50 items
- Heavy Import Duties from China
- Export schemes & Policies may arrive
- Export schemes & Policies may arrive
- Higher Customs Duties
- Increase import tariffs by 5%-10%
- of items targeted for import duties
- Important Global Trade Factor Points
- USA wants India to buy American farm goods of $5-6 billion
- USA wants WTO to alter rules for China & India
- Rise import duties on more than 50 items
India plans to rise import duties on more than 50 items. Such as electronic, goods, chemicals and handicrafts.
- Heavy Import Duties from China
Officials and industry sources said it targets nearly $56 billion worth of imports. From Countries like; China and other countries.
- Export schemes & Policies may arrive
Some schemes may come to focus on increasing Indian exports to compensate the slack domestic consumption.
- Higher Customs Duties
Two government sources said higher customs duties will be imposed on goods.
For example: mobile phone chargers, industrial chemicals, jewellery and handicraft items. Also lamps, wooden furniture, candles, etc.
- Increase import tariffs by 5%-10%
Govt. has identified some items and decided to rise import tariffs by 5%-10% as suggested by trade and finance ministry.
- Items targeted for import duties
Trade ministry officials of the committee with local industries reference has initially planned to target more than 130 items. The items account for about $100 billion worth of imports.
- Important Global Trade Factor Points
Likewise, the finance minister needs to cover some important global points on her second budget.
Global factors like: China and USA trade war tension, Volatile oil prices, New multilateral trade rules with USA and WTO.
- USA wants India to buy American farm goods of $5-6 billion
USA wants India to buy another $5-6 billion worth of American farm goods. If India does this then it may win reinstatement of a key U.S. trade concession and seal the wider pact.
- USA wants WTO to alter rules for China & India
USA says India and China take unfair advantage of their developing country status under World Trade Organization WTO rules. But if WTO rules are altered against India’s wishes. It could further affect its weak trade competitiveness and merchandise exports.
In addition to this, Indian Exports have been remained low for many reasons. Significant amount of red tape and hurdles exist for exports needs to be identified and removed.
However, hopefully the Budget 2020 will include import, export and foreign trade to improve Indian Trade.
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