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Free Trade Agreements and export basket diversification as important tools for export growth: Comparing India and Vietnam

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Vietnam is emerging as a new manufacturing hub and seem to be making substantive gains due the China plus one strategy. Manufacturing as a percentage of GDP is 13 per cent in India, while it is 25 per cent in Vietnam. While there can be various factors like labor cost advantage, strategic location, skilled labor, etc, that play an important role, this article will talk about the role of Free Trade Agreements (FTAs) and diversified export basket that have spearheaded this trend. The rise of manufacturing activities in Vietnam is clearly reflected in its export performance, and its share in global export increased from 0.6 per cent in 2011 to 1.7 per cent in 2022. For India, the share in global exports rose by merely 0.2 per cent, from 1.8 per cent in 2011, to 2 per cent in 2022. The numbers clearly show that Vietnam is giving serious competition to India’s exports.   A clear cut off can also be seen in export to GDP ratio for Vietnam, during the period before and after 2010, while forIn
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Bangladesh and Vietnam dominate the global textile and clothing export market: What can India do to make its mark ?

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  Zara, H&M, Adidas, Nike and GAP are well-known bands for apparel and clothing customers across the globe. The garment manufacturing for these brands is mostly done in Bangladesh and Vietnam. Have we ever wondered why India is not there is the list of suppliers to these top garment brands, despite being a larger economy as compared to Bangladesh and Vietnam? This blog tries to explore the reasons that are posing challenges for India’s Textile and Clothing (T&C) sector to exploit its full potential in the global market. Image credit: The Independent T&C sector contributes 2.3 per cent to India’s Gross Domestic Product (GDP), 13 per cent to industrial production and 12 per cent to its exports. This sector is the second largest employer in the country providing direct employment to 45 million people and 100 million people in allied industries (Invest India, 2023). While India’s T&C sector holds immense importance for the Indian economy, its exports from India are unable
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Is Slowing Private Investment Drifting India away from Potential Growth?

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Private investment plays an integral role in determining a country’s economic performance. Investment injects the necessary capital into the economy, thereby spurring economic activity, creating new jobs, boosting exports, and hence strengthening an economy’s GDP. COVID-19 pandemic had slowed down the inflow of private investment in India, largely driven by reduced consumer demand. Now, with the revival of consumer demand, an equivalent private investment revival is also expected. But is this happening?  Source: iStock  Let’s look at some statistics Private investments not rising as per expectations Private consumption rose from 55.5 per cent of GDP in Q1 of 2021-22 to 61.1 per cent in Q1 of 2022-23. The private investment during the same period, however, has risen only marginally - from 28.2 per cent of GDP in Q1 of 2021-22 to 29.2 per cent in Q1 of 2022-23. According to the IVCA-EY monthly PE/VC roundup,  USD 3.3 billion of Private Equity/Venture Capital  (PE/VC)investments
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Inflationary Times : Trends and Road Ahead

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Source: Rediff.com Just when the global economy was recovering from the COVID-19 pandemic driven economic crisis, it was struck by yet another shock in the form of Russia-Ukraine conflict that has been on-going since February 2022.   This has shaken the global economic order in more ways than one. One of the most concerning impacts has been the price rise that is at a record high in most of the global economies.  According to the International Monetary fund (IMF), global economy growth is projected to slow from an estimated 6.1 per cent in 2021 to 3.6 per cent in 2022 and 2023. The war led price escalation has led the inflation projection for advanced and emerging economies to be 5.7 and 8.7 per cent respectively in 2022. India is no exception in this regard and the inflation rate (Consumer Price Index) is at 7.8 per cent, the highest since 2014. The rate is way higher than the permissible limit of 6 per cent that is set by RBI. Though the global trend is driving the fuel and food in
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Optimizing Use of Land Resource for Renewable Energy Projects

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  Renewable Energy needs Land Like any other industrial unit, a Renewable Energy (RE) plant needs a reasonable extent of land tract.  However, the unique characteristic of land resource in terms of fixed supply and dynamic demand makes land availability a key challenge for the RE developers. Source: Emerging Europe Ways of acquiring land/Types of land  To understand the land dynamics of RE projects, it is imperative to understand the types of land that are available to be taken up for these projects and this can be based on the ownership of land – It can be- -           Government owned land - revenue land; forest land;  land given on patta to landless farmers ; waste land -           Community owned land -           Private land which is agricultural or non-agricultural in use -           What are wastelands? With respect to land usage, there can be plots of land which as per the state governments are not being used – it can be private, government or community land. Some term these
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Use of land as collateral: Do Land Records comprehensively reflect this information?

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  Source: Shutterstock For an emerging economy like India, access to finance is critical for economic growth. According to the recently conducted NABARD All India Rural Financial Inclusion Survey (NAFIS) in 2016-17, overall incidence of indebtedness in the surveyed households is 47.4 per cent and average outstanding debt per indebted household is Rs 91,407. Around 32.7 per cent of the respondents in NAFIS survey reported that they resort to borrowing in the wake of crisis/emergency situations. From lenders’ perspective, role of collateral is quite critical and land is one of the most commonly used collaterals. Rajeev et al. (2011) brought out the role of land as a security for accessing credit through formal (institutional) sources – 59 per cent of formal loans were given against land as security. Narayan and Chakraborty (2019) used the AIDIS data to calculate the proportion of institutional credit with mortgage of immovable property. The authors observe that within agriculture, the pe
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