Obviously, it would be too much to expect the Commerce Ministry alone to tackle these issues. But since these are among the most important constraints on India's exports currently, it was to be expected that the Commerce Minister would take note of these and at least try to co-ordinate with other Ministries such as Power and Surface Transport in order to ensure some cohesive policy with respect to these problems. (Instead, the only co-ordination seems to have been with the Ministry of Finance, and that too, only because the strategy conforms to the Finance Ministry's known approach of preferring tax giveaways to increased public productive expenditure.)
 
Sustained export expansion requires a more comprehensive and systematic macro strategy on the part of the government, which includes a substantial increase in public infrastructure spending. Such a strategy would also end up improving conditions for producers for the domestic market as well, and therefore aggregate employment conditions.
 
Indeed, such a systematic and strategic policy would be necessary if the export basket is to be diversified towards more exports that have the potential for greater dynamism in world markets. Over the past decade, the commodity composition of exports (chart 6a & 6b) suggests that this has not occurred so far. But to build a market for Indian products in the world markets requires more than just reliance on private entrepreneurship, as the experience of all successful exporting countries amply demonstrates. It requires systematic government involvement in a variety of forms.

Chart 6a >> Click to Enlarge

Chart 6b >> Click to Enlarge
 
Sadly, the Exim Policy does not appear to have recognised this at all. Instead, it sticks within the now familiar and largely discredited "liberalisation" paradigm, in which it is assumed that deregulation and tax sops will be sufficient to make private producers not only increase production but also improve productivity. This is why the projections of export growth in the so-called "thrust sectors" indicated in Chart 7, are mostly close to past patterns The big increase that is expected is on agricultural exports, following upon anticipated private response to the liberalising measures outlined below.

Chart 7 >> Click to Enlarge
 
The trend in India's share of exports (chart 8) in some of these crucial areas is not cause for much optimism. While India's share of world trade in rice and spices has grown, in several other sectors India's share has fallen, sometimes quite sharply.

Chart 8 >> Click to Enlarge
 
In fact, the only evidence of some strategic orientation in the current Exim Policy is the launch of the new "Focus Africa" programme, which is certainly welcome. The past direction of trade (indicated in Charts 9a and 9b) suggests that African markets have been greatly neglected by Indian exporters, which is a mistake because Africa (contrary to general perception) has been one of the faster growing regions of the world in the past decade !

Chart 9a >> Click to Enlarge

Chart 9b >> Click to Enlarge
 
Consistent with the basic market-determined economic strategy framework of this government, the main focus of the new Exim Policy exercise is on a range of measures that will further liberalise the export trade, especially with respect to agricultural exports, and on providing some fiscal incentives including duty neutralisation and other tax sops to exporters. It also relies on more Special Economic Zones, provided with even more incentives, to take up the task of export promotion, even though the experience with Export Processing Zones so far has been dismal.