The figures for May reveal that India's trade deficit has worsened further, what with exports declining and imports — notably of gold — rising.
Heightened imports can, of course, lead to much economic gain, but a persistent trade deficit needs to be addressed (and corrected) with proactive policy.
The data show that imports from tiny Switzerland have shot up an eyepopping 128% in April (over the like period last year), making it the top country of import, well ahead of China.
The figures seem questionable and call for a proper scrutiny, along with a medium-term plan to change the scenario of persistent trade deficits with our main trading partner, China. There is much scope to press for improved trade access.
But the latest trade figures also point at structural weaknesses in our international trade. Now the single biggest item in value terms in India's merchandise exports are petroleum products, but these are highly import-intensive, with quite minimal value-addition and thus hold little upside for export growth.
More important, for the next biggest item, engineering goods, which account for about 19% share of exports, the monthly figures show a markedly declining growth trend. The same is the case for textiles, which make up about 9% of the export basket.
We clearly need to strategise policy to boost competitive advantage in such high potential sectors like engineering goods, textiles and transport equipment. Other segments like pharmaceuticals and fine chemicals hold much potential.
But the biggest opportunity may well be in electronic goods, which account for barely 2% of our export share, about the same as ore and minerals. What is required is vision to chalk out and implement an eco-system that steps-up manufactures and boosts productivity in tandem. It would pay rich dividends, for years.
Heightened imports can, of course, lead to much economic gain, but a persistent trade deficit needs to be addressed (and corrected) with proactive policy.
The data show that imports from tiny Switzerland have shot up an eyepopping 128% in April (over the like period last year), making it the top country of import, well ahead of China.
The figures seem questionable and call for a proper scrutiny, along with a medium-term plan to change the scenario of persistent trade deficits with our main trading partner, China. There is much scope to press for improved trade access.
But the latest trade figures also point at structural weaknesses in our international trade. Now the single biggest item in value terms in India's merchandise exports are petroleum products, but these are highly import-intensive, with quite minimal value-addition and thus hold little upside for export growth.
More important, for the next biggest item, engineering goods, which account for about 19% share of exports, the monthly figures show a markedly declining growth trend. The same is the case for textiles, which make up about 9% of the export basket.
We clearly need to strategise policy to boost competitive advantage in such high potential sectors like engineering goods, textiles and transport equipment. Other segments like pharmaceuticals and fine chemicals hold much potential.
But the biggest opportunity may well be in electronic goods, which account for barely 2% of our export share, about the same as ore and minerals. What is required is vision to chalk out and implement an eco-system that steps-up manufactures and boosts productivity in tandem. It would pay rich dividends, for years.
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