Is it time for India to have a proper trade policy in place?

Today India is caught in a situation where the wait for exporters to get containers is getting awfully long. The reason is the imports from the US are not as substantial as the imports. Hence container timing and economics don’t appear to work.

Most shipping companies are just coming out of a prolonged slowdown and do not have the appetite for taking on additional costs. Indian exporters just do not have the margins to bear the extra costs. The government needs to intervene with a calibrated trade policy.

Over the last few years, India has expended a lot of time, energy and bandwidth on economic policy, FDI policy, investment policy etc. However, there has not been much focus or emphasis put on trade policy, which is one reason why trade deficit continues to widen.

There are examples to learn from. Japan, Germany and China have been net exporters and run massive trade surpluses for a very long time. Even if you leave out Germany since it is part of the EU, Japan and China can be instructive for India to understand how they have managed without impacting the efficiency of exports

The need of the hour, therefore, is to have a well calibrated policy on how India proposes to grow its trade. It is not just about products but also about logistics. It is time to look seriously at trade to avoiding losing the benefits of the narrowing trade deficit.