India should diversify exports to other countries, fasten free trade agreement (FTA) negotiations and also continue dialogues with Washington to conclude the proposed Bilateral Trade Agreement (BTA) with the US, Economic Advisory Council to the Prime Minister (EAC-PM) Chairman S Mahendra Dev said on Friday.
Addressing 'First ISID@40 Distinguished Person Lecture', Dev said despite protection policies and reduction in international trade, there are a lot of opportunities for India to increase its share in world merchandise trade.
"As mentioned earlier, India's trade policy for manufacturing should be to diversify exports to other countries in Asia, Latin America, Africa, some developed countries, fasten FTAs and to continue dialogue with the US," he said.
The eminent economist noted that rule-based World Trade Organization (WTO) is always better than protectionism.
His remarks assume significance as the US is putting pressure on India to stop buying crude oil from Russia. The US, on October 22, imposed sanctions on Russia's two largest crude oil producers, Rosneft and Lukoil, barring all American entities and individuals from conducting business with them.
The US has imposed 25 per cent tariffs on India as a penalty for purchasing oil from Russia. It is over and above the 25 per cent reciprocal tariffs on Indian goods entering American markets. Overall, Indian goods are attracting a steep 50 per cent additional import duties in the US.
New Delhi has described these duties as "unfair, unjustified and unreasonable".
He also pointed out that no emerging market of India's size has grown at 7 or 8 per cent for a decade or more without strong export growth.
Dev emphasised that India must have many more middle level manufacturing units with 200 to 500 workers.
On manufacturing, among other things, small size of the firms with majority operating at less than 10 workers is the major problem, he added.
Observing that in 1700 AD, India's share in world GDP was 25 per cent, he said some estimates show that by 2043, the share of India in world GDP is likely to be 25 per cent.
