India has the potential to become the world’s fifth-largest exporter of goods by 2030 with the textile industry set to regain its place as the global garment hub, an HSBC report said.
“Despite struggling with a number of structural impediments to growth, prospects for medium-term growth in trade remain strong,” the HSBC report said.
“The economic potential for India remains strong, with the growing population and rapidly expanding middle class — it presents opportunities for business. India is forecast to emerge as the world’s largest middle-class market, surpassing both China and US,” said Sandeep Uppal, MD and head, commercial banking, HSBC India.
The report comes barely a fortnight before the government’s planned unveiling of a new five-year Foreign Trade Policy that will likely include sops to spur export and incentives for domestic value-added products — the proportion of exports truly produced in India, which will be dovetailed with the “Make in India” programme that Prime Minister Narendra Modi will unveil later this month.
A higher DVA component in exports is important for creatting jobs and boosting domestic manufacturing. “The DVA component in Indian exports has been declining — alternatively the foreign value-added (FVA) portion of exports has been on the rise,” Crisil said in a recent research report.
The HSBC report said that the UAE is likely to remain India’s top export destination by 2030, and China is forecast to emerge as the second-largest export market, displacing the US.