Exports Current Affairs - 2019
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The World Bank-ILO report titled Exports to Jobs: Boosting the Gains from Trade in South Asia has been released. The report studies the effect on local employment and wages of changes in exports by combining disaggregated data from household-level or worker-level surveys with trade data from India and Sri Lanka.
Key Observations made in the Report
- Increasing exports together with leading to better jobs and higher wages in India will generate more formal sector employment for youth and women.
- Increasing exports would boost average wages and the biggest beneficiaries of this wage gain would be the high-skilled, urban, more experienced, and mainly male workers.
- For low-skilled workers, there would be an increase in formal jobs.
- Exports can improve the performance of local labour markets. Hence labour market policies must aid different groups of workers to acquire the right skills and ensure that the gains of increased exports are shared more broadly across society.
India and Boosting Exports
- India’s growth rate of 7.2 per cent in 2017 reduced the number of people living in poverty.
- Even then, most Indians doesn’t have regular jobs in the formal economy and differences in wages across regions and in the quality of employment opportunities prevail.
- India’s trade has been reduced from 55.8 per cent in 2012 to 41.1 per cent of the Gross Domestic Product between in 2017.
- Indian exports which are mainly capital intensive like chemicals and fabricated metals reduces the direct benefits to workers.
- The report notes that India can ensure that greater export orientation can boost workers’ gains from trade and spread them more widely, so benefiting disadvantaged groups.
The report also concludes that more exports can create benefits for workers by raising wages and reducing informality and this requires stronger policies to ensure these benefits reach everyone in the labour market and don’t leave any groups behind.
India’s export to China is expected to reach an all-time high in the financial year 2018-19.
Increase in Exports
The increase in the exports to China is attributed to US-China trade spat creating new opportunities for exporters and Beijing removing some trade barriers in its effort to check the growing bilateral trade imbalance.
The growth of exports was driven by the following sectors which include marine products, organic chemicals, plastics, petroleum products, grapes and rice.
Bridging the Trade Deficit
Indian exports are expected to reach an all-time high in the current financial year. The exports between April and December stood at $12.7 billion which is closer to last year’s exports of $13.33 billion.
India feels that more efforts are required for greater market penetration in China to bridge the trade deficit. India’s trade deficit with China stood at $63 billion in 2017-18. This $63 billion trade deficit was more than a third of India’s total trade deficit. The exports to China stood at $13.3 billion and imports from China stood at $76.38 billion in 2017-18.
Acknowledging the need to take steps to check the deficit, the following steps have been initiated to bridge the deficit:
- China signed three export protocols with India on rice, fishmeal and tobacco to allow imports of the three items.
- An announcement regarding Chinese import quotas for sugar and rice for 2019 is expected soon which would aid in planning their exports well in time.
- India is also expecting to sign a protocol for export of Indian soyabean meals, cakes and pomegranates to China in the near future.
To make the most of the US-China trade dispute, the Department of Commerce had taken the initiative to identify and share with Indian exporters and other stakeholders, specific lines where the US will lose competitiveness in China and where India had an export potential.