India’s ambition to emerge as a global export powerhouse is gaining momentum, fueled by robust policy frameworks and a strategic vision outlined in PwC India’s recent report. The journey to achieving USD 1 trillion in merchandise exports by 2030 is marked by opportunities and challenges, with international trade playing a pivotal role in India’s economic transformation. As noted by Sanjeev Krishan, Chairperson of PwC India, the global trade landscape is undergoing rapid changes, driven by technological advancements, shifting consumer preferences, and evolving geopolitical dynamics. Against this backdrop, India is positioning itself to expand its share in the global trade ecosystem.
Over the past two decades, global merchandise trade has seen an impressive rise, growing from USD 9.4 trillion in 2004 to USD 23.5 trillion in 2023. India’s share in global trade has similarly seen steady progress. Following the liberalization, privatization, and globalization (LPG) reforms of the 1990s, India’s participation in global trade increased from 0.5% in 1990 to 1.85% in 2023. Such progress underscores the country’s ability to adapt and grow in a competitive international market. Flagship programs such as “Make in India” and “Atmanirbhar Bharat” have further propelled this growth, while initiatives like the Production Linked Incentive (PLI) scheme have strengthened India’s manufacturing capabilities and global competitiveness.
India’s economic reliance on trade is evident. The share of merchandise and services trade in India’s GDP has grown from 15% in 1980 to 46% in 2023. This increased integration into global markets has positioned India as the world’s fifth-largest economy, reflecting the critical role exports play in economic expansion. Yet, to meet the ambitious target of USD 1 trillion in merchandise exports by 2030, India must address both internal inefficiencies and external challenges.
VIKSIT
PwC’s report introduces a strategic framework termed “VIKSIT,” designed to navigate the complexities of the global trade environment. This framework offers a comprehensive pathway to unlock India’s export potential. VIKSIT, an acronym, stands for Value addition and volume-led growth, Inclusive industrial development, Knowledge and capacity building, Sustainable supply chains, Infrastructure investments, and Technology enablement. Each vector within this framework addresses a critical aspect of export competitiveness.
Value addition and volume-led growth form the cornerstone of the strategy. By shifting focus from low-value commodities to high-value goods, India can enhance the sophistication of its export basket. This transition is crucial to mitigating the risks of commoditization and establishing a foothold in emerging sectors. Meanwhile, inclusive industrial development emphasizes integrating micro, small, and medium enterprises (MSMEs) into the export framework. Currently, only 1.36% of India’s MSMEs engage in exports, a figure that highlights the untapped potential within this sector. By addressing key barriers—such as limited access to finance, export procedures, and market information—India can unleash a new wave of export-driven growth.
Knowledge and capacity building focus on equipping the workforce and industries with the skills and expertise necessary to compete in international markets. This effort complements the emphasis on sustainable supply chains. As global trade increasingly aligns with climate change mitigation policies, Indian exporters must adapt to evolving regulations. Carbon footprint reduction within value chains will not only enhance market access but also strengthen India’s position as a responsible trading partner.
Infrastructure investments and technology enablement are the final pillars of the VIKSIT framework. Port efficiency remains a pressing concern. In 2023, the average turnaround time for containerized cargo at Indian ports stood at 156 hours, with customs processes accounting for 19 hours. For inland container depots (ICDs), the turnaround time was 128 hours, with customs delays taking up 32 hours. These inefficiencies, compounded by inadequate technology adoption, hinder India’s export competitiveness. By modernizing port infrastructure and integrating advanced technologies, India can significantly reduce logistical bottlenecks.
PwC’s report evaluates three scenarios for achieving the USD 1 trillion export target. The optimistic scenario envisions India reaching this milestone by FY29, assuming an annual export growth rate of 18%. This projection is benchmarked against India’s export performance during 1986-1995 and the COVID-19 recovery period. Under the business-as-usual scenario, the target would be met by FY31, with a growth rate of 14.5%. A conservative estimate places the milestone in FY33, requiring a 10% annual growth rate. The optimistic scenario underscores the potential for acceleration if geopolitical conflicts are mitigated and strategic interventions are implemented.
India’s efforts to enhance export performance are already yielding results. The country now has 20 active trade agreements, providing access to diverse markets. However, the challenge lies in navigating non-tariff barriers and compliance burdens that often undermine competitiveness. Expanding product diversification and market access will be critical. For instance, the electronics, automobile, and food processing sectors—highlighted in the VIKSIT framework—offer immense potential for growth if supported by targeted interventions.
Role of technology in exports
The report also highlights the transformative role of technology in exports. Technology fossilization has constrained export efficiency, product quality, and unit production. Slow adoption of advanced manufacturing techniques has limited India’s ability to cater to global market demands. Enhancing technological capabilities within the export ecosystem is imperative. For example, modernizing customs processes through digital solutions can significantly reduce processing times, while advanced manufacturing technologies can improve product quality and competitiveness.
Climate change is another factor shaping India’s export strategy. The acceleration of climate mitigation policies globally demands that Indian exporters address carbonization within their value chains. Both pricing and non-pricing measures for climate action are influencing market access and competitiveness. Aligning with these trends will not only secure India’s place in global trade but also enhance its reputation as a sustainable trading partner.
India’s ambition to achieve USD 1 trillion in merchandise exports is more than a numerical target; it represents a vision for sustained economic growth and global leadership. The VIKSIT framework provides a roadmap that blends sector-specific strategies with ecosystem-wide interventions. By focusing on value addition, inclusive growth, infrastructure, and sustainability, India can navigate the complexities of global trade and emerge as a dominant player in the international market.
As the PwC India report aptly concludes, achieving this ambitious goal requires a collaborative effort between public and private stakeholders. With concerted action, India is well-positioned to transform its export landscape, fueling economic growth and strengthening its role in global trade.
