Easy trade finance system key to achieve $2 trn export target by 2030: DGFT

Traders and the government have to work on the issue of obtaining easy finance both for domestic and cross-border trade

Easy availability of affordable trade finance is the key to achieving India's $2 trillion exports target by 2030 in goods and services boosting export competitiveness, a senior government official said in an ASSOCHAM event on Thursday.

Subhash Chandra Aggarwal, additional director general of foreign trade (DGFT), Ministry of Commerce and Industry said that traders and the government have to work on issues like obtaining easy finance both for domestic and cross-border trade.

India has set an ambitious target to take its total goods and services exports to $2 trillion by 2030.

Aggarwal said that development in digital technologies like Artificial Intelligence (AI) and blockchain will provide leverage to reduce the cost of financing.

“I am often told that obtaining finances for domestic trade is easier than obtaining financing for cross-border trade. This could be because of the higher risk perception in cross-border trade. Mitigating and correcting this perception is needed to enable us to be competent and competitive in the global market, trade finance plays a crucial role here”, he added.

Speaking at the same event, Sanjeet Singh, senior adviser, NITI Aayog said sectors such as aluminium and steel would be "directly impacted" by the European Union's (EU) carbon tax, and exports from these segments would be subjected to a certain amount of tax.

“This is an example (EU’s carbon tax) where countries are going beyond the realm of the World Trade Organization (WTO). India and the EU both are members of this multi-lateral body which deals with global exports and imports,” he added.

Singh said recent global developments have resulted in a paradigm change in how trade is being conducted across the globe.

“Labour, gender, deforestation, and sustainable development have become an important part of the trade. India is fast becoming a party to a number of global alliances because of the recognition that India is a country which nobody can afford not to be doing business with,” he added.