World Bank: Cut Subsidies, Tariffs to Boost Exports

The World Bank has advised India to reduce subsidies and import duties to improve competitiveness and become an export powerhouse.
In a report released on Wednesday, the bank identified apparel, agribusiness, automotive and electronics as the sectors with high export potential.
While India's 14% annual export growth between 2000 and 2013 puts it in the first tier of South Asian countries when it comes to merchandise exports, its goods reach only 1.5% of the global exports market, it said.
The bank said that with the right set of productivity-enhancing policies, South Asia, led by India, could more than triple its share in global markets of electronics and motor vehicles and come close to doubling its already significant market share in wearing apparel
(excluding textiles and leather) by 2030.
In agribusiness, it said passive and non-targeted subsidies on water, fertilisers and minimum support price have encouraged farmers to continue to produce lowvalue crops using low productivi
ty and unsustai nable techniques while restric tions on agricul ture markets ha ve constrained productive priva te investments in higher value food products.
\x93The success of Basmati rice and mint oil in India ue of public private
shows the value of public private partnerships in R&D and extension services,\x93 the bank said in a report titled, 'South Asia's turn: Policies to Boost Competitiveness and Create the Next Export Powerhouse'.
For the apparel sector, the multilateral lending agency suggested reforms in the duty drawback scheme to facilitate import of fabrics for exports.
It said the current system imposes delays that are unacceptable to global buyers, cutting Indian exporters from the increasingly important man-made fibre segment.
\x93A large part of Bangladesh and
Sri Lanka's success in apparel has resided in the fact that exporters have no difficulties importing fabric,\x93 it said.
The bank said India in particular has made substantial progress in developing top of the value chain capabilities such as becoming a global research and development (R&D) hub for major auto-parts and electronics producers.

Readers choice: TOP-5 articles of the month by UkrAgroConsult