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Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the growth in Indian export basket during 1HFY22 showed a healthy mix of both labour-intensive items and high-value manufactured items.

However, the rating agency expressed worries that it will not be easy to maintain the current export growth momentum, as the stimulus-induced demand in developed economies might normalise in 2022 and it could tilt back in favour of services. Also, the political backlash against globalisation, which became pronounced 2012/2013 onwards, but has taken a backseat lately due to the COVID-19 pandemic, may resurface.

According to the report, a mix of policy support and a carefully crafted strategy which continuously explores the emerging opportunities of exports of manufactured products in developed and emerging markets can be a way forward. As the population in developed markets is aging, they need a different mix of goods and services than hitherto produced and exported by emerging economies to developed economies. Therefore, the way forward for India’s exports is to not only to complement the existing export basket with a new product mix but also focus more on emerging market opportunities.