India should aim to achieve 5% share in world trade: FIEO .

The rising share of India's international trade should encourage the country to aim for a five per cent by 2020.

India's share in total world trade, including trade in merchandise and services sectors, increased from 1.1 per cent in 2004, to 1.5 per cent in 2006, according to a WTO estimate.

The Federation of Indian Export Organisation (FIEO) said the share of India's international trade in the GDP is constantly improving - touching 55 per cent in 2009 - and at the current trend of globalisation and regionalisation, the share is likely to grow further by 2020.

India's merchandise trade in 2009-10 was $455 billion while services are estimated at $210 billion. The world trade in 2020 is estimated to be $48 trillion. The target of increasing our share to five per cent of the world trade would result in enhancing our international trade from $665 billion to $2,400 billion in next 10 years, requiring a Compound Annual Rate of Growth of 14.25 per cent.

Patents

By 2020 the pharmaceutical market is anticipated to more than double to $1.3 trillion, with Brazil, China, India, Indonesia, Mexico, Russia and Turkey - accounting for one fifth of global pharmaceutical sales.

Over 20 per cent of the world's generics are produced in India. Drugs worth nearly $70 billion are likely to go off patent in the USA, offering India a chance to manufacture a considerable share of the products to exploit the ensuing generics opportunity, FIEO said.

With foreign manufacturers exploring cost-effective investments for research centres and for outsourcing production services and authorising products and technologies, a concerted strategy should be made for export of these products and services to increase exports to $100 billion by 2020.

The textile sector is another area which needs a policy push.

Textile sector

According to the FIEO, “If we are able to achieve 20 per cent growth in our textiles exports per annum, and 15 per cent growth per annum in domestic production, then our domestic textile market size would be $213 billion by 2020 and exports would be around $164 billion.”

Given the long term growth of 7 per cent in world trade in textiles, India's share would be around 14 per cent in 2020 at a growth of 20 per cent per annum, which would be almost four times India's current share of 3.4 per cent.

Source : Business Line