New Delhi: The new Omicron variant of Covid-19 could threaten India’s sustained economic recovery from the pandemic, even as the country is better prepared now to address the challenges, according to Union Minister of State of Commerce and Industry Anupriya Patel.
In an email interview with ThePrint, the minister also talked about the mutual commitment of India and the United Arab Emirates to finalise a free trade agreement and expressed confidence that India will touch $46-47 billion in agricultural exports and $400 billion in merchandise exports.
“India’s economic recovery is expected to gain further strength in the remaining quarters of the financial year on the back of upbeat market sentiments, rapid vaccination coverage, strong external demand and continuous policy support by Government and RBI. However, the new Omicron variant poses a challenge to the sustained recovery,” Patel, the Apna Dal (S) president and Mirzapur MP, said.
She added that the economy, however, is better prepared this time with “lessons learnt from the second wave”.
According to official data released last November, India’s GDP growth slowed to 8.4 per cent in the second quarter of 2021-22 but the economy has surpassed the pre-Covid level. The GDP growth in April-June quarter this fiscal was 20.1 per cent. The Indian economy had contracted by 24.4 per cent in April-June 2020.
Asked what has driven the economic recovery, Patel said: “India’s pandemic recovery was driven by a revival in services, full-recovery in manufacturing and sustained growth in agriculture sectors.”
She added that the recovery indicates that the investment cycle has kickstarted and that “surging vaccination coverage and efficient economic management” have activated the macro and micro drivers of growth.
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India, UAE trade pact to open ‘critical gateways’
As India and the UAE are close to finalising a Comprehensive Economic Partnership Agreement (CEPA) — a broad-based free trade agreement — Patel remarked that “economic and commercial engagement with the UAE continues to be exceptional”.
India resumed talks with the UAE for a free trade agreement in July 2021 after they were stalled in 2008. Last month, Commerce and Industry Minister Piyush Goyal said negotiations between the two countries are at “advanced” stages. If inked, it would be the first CEPA to be signed by India in over a decade. India is also currently negotiating economic agreements with countries like Australia, the UK, Israel, Canada and the European Union (EU).
Speaking on the headway made by India and the UAE in trade talks, Patel said, “There is a strong commitment from both sides at the highest levels to further enhance the trade and economic relationship and CEPA is a testimony to this mutual commitment.”
She added that the agreement could aid in job creation and raise living standards in both countries, as well as contribute to the development of multi-sectoral economic value chains in India and provide opportunities, especially in emerging areas like big data, robotics, artificial intelligence etc.
“The CEPA will enable both countries to form critical gateways for exports to large markets in the wider region. For example, our exports to the UAE could be substantially transformed for exports to the Middle East and North Africa markets,” said Patel.
According to data from the Union commerce ministry, total trade between India and the UAE stood at $59.1 billion in 2019-2020 but dipped to $43 billion during the pandemic in 2020-21. That said, the UAE remains India’s third-largest trading partner after the US and China.
India likely to achieve $46-47 billion in agri exports
The minister said that India is poised to achieve a record high in agricultural exports this fiscal year, which is likely to be about $20 billion short of the $60 billion target envisaged under the National Agriculture Export Policy 2018.
According to Patel, agri exports are likely to touch $46-47 billion by this fiscal, given that they have so far amounted to $41.25 billion.
“India has been recognised as a reliable supplier of food products during this tough period. Even though our exporters are facing issues like shortage of containers, high freight rates and other logistical challenges,” she said.
India will likely achieve the $60 billion target in agri exports in 2022-23, she added.
Record high in merchandise exports
India is set to touch a record high of $400 billion in merchandise exports in 2021-22, having already achieved $300 billion in the first nine months, government data showed Monday.
Patel is confident India will reach the estimated goal, saying, “With tight monitoring by the country, trade missions, commodity groups and export promotion councils, and supported by export promotion measures, India will achieve $400 billion exports this year.”
Asked what target has been set for 2022-23, the minister added: “Though no goal has been set as of now it is expected that sustained efforts for trade enhancement will provide India a stronger foundational base in the coming financial year also”.
(Edited by Saikat Niyogi)
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