Context:
Indian exports are facing competitiveness pressures due to high domestic input costs, inadequate testing infrastructure, and logistics bottlenecks, as flagged by States and industry representatives at a recent policy forum.
Key Highlights:
Government Initiative / Policy & Institutional Details
• Issues were discussed at the Board of Trade (BoT) meeting chaired by Piyush Goyal on November 25.
• BoT functions as an advisory body on foreign trade policy, export promotion, and procedural simplification.
Data, Targets, Schemes Mentioned
• Raw material prices in India are reported to be 15–20% higher than global prices, eroding export margins.
• Market Access Initiative (MAI) was reportedly non-operational for nine months, affecting export promotion support.
• Export Promotion Mission (EMP) modalities were announced on December 31, 2025, following the Union Budget announcement.
Sector-wise and State-specific Concerns
• Testing Infrastructure Gaps:
– Rajasthan and Uttarakhand lack adequate testing laboratories, delaying certification and quality assurance.
– Seafood exporters seek accreditation from Marine Products Export Development Authority (MPEDA) and National Accreditation Board for Testing and Calibration Laboratories (NABL).
• Logistics Constraints:
– Container shortages and shipping line levies increase freight costs.
– Assam tea exporters face high freight rates from ICD Amingaon to Kolkata.
• Trade Policy Issues:
– US tariffs and failure to conclude a bilateral trade deal have dampened export momentum.
• Sectoral Inputs:
– MSMEs report cost disadvantages in domestic raw materials.
– Textiles sector faces high energy costs.
– Gem and Jewellery Export Promotion Council (GJEPC) raised concerns over restrictions on gold, platinum, and silver imports.
• Governance at District Level:
– District Export Committees require better monitoring to ensure regular meetings, as flagged by the Morbi ceramics industry.
Relevant Prelims Points:
• Board of Trade (BoT): Advisory body for foreign trade policy.
• Market Access Initiative (MAI): Financial assistance scheme to promote exports.
• Export Promotion Mission (EMP): Budget-announced mission to boost exports.
• MSME: Micro, Small and Medium Enterprises—major contributors to exports.
Relevant Mains Points:
• Economic Impact: Higher input and logistics costs reduce price competitiveness in global markets.
• Infrastructure Deficit: Inadequate testing labs undermine compliance with international standards.
• Governance Issues: Delays in scheme operationalisation weaken policy credibility.
• Federal Dimension: State-level constraints directly affect national export performance.
- Way Forward:
– Align domestic raw material pricing with global benchmarks.
– Expand and accredit testing laboratories in export-intensive States.
– Improve container availability and freight rationalisation.
– Ensure timely rollout and monitoring of export promotion schemes.
UPSC Relevance
• GS 3: Economy, External Trade
• GS 2: Governance, Cooperative Federalism
• Prelims: Export schemes, BoT