'Need to be reliable trade partner to drive growth'

Turning India into a trusted partner for global trade is a key opportunity that could drive growth, the finance ministry's review document released on Monday said, identifying a digitally skilled labour force, constructive use of AI, further reductions in compliance requirements for MSMEs, clean energy transition and broad reforms in skilling, learning and health as crucial areas of focus for the Indian economy going forward.

- Rajeev Jayaswal

The document, effectively identifying what will be in focus for the NDA government's next term should it retain power in the upcoming general elections, noted that geopolitical frictions have led to geoeconomic fragmentation and disrupted global supply chains, bringing not just a challenge but an opportunity for India to emerge as a reliable partner for "friend-shoring" and "onshoring" of business.

Friend-shoring refers to giving import preference to allied nations, while onshoring refers to domestic procurement of goods and services.

In the preface of the document-"Indian Economy-A Review"-chief economic adviser (CEA) V Anantha Nageswaran said, "Recent events in the Red Sea may have brought back concerns over reliance on global supply chains, further aggravating the slower growth in global trade in 2023. In other words, exporting one's way to growth will not be easy. This reinforces the need to lower logistics costs and invest in product quality to hold on to and expand market share in areas where India has an advantage."

One of the busiest global shipping routes along the Red Sea has been disrupted after Iranbacked Houthi rebels began targeting vessels in retaliation to the war in Gaza, the latest in supply chain disruptions after the pandemic and strained ties between the west and China.