Answer: As per India's New Foreign Trade policy, the Government of India (GOI) aims to triple the Goods & Services exports to $2 trillion by 2030. As per Economic Survey 2023, the Export sector comprises 20% of India's Gross Domestic Product (GDP) showcasing impetus on “Export led growth”. 

Opportunities & Advantages of “Export Led Growth”: 

• Reduce CAD: Increasing export led growth will lead to narrowing down of India's Current Account Deficit (CAD) which currently stands at $8.3 billion (December, 2023) 

• It will result in stabilizing the Balance of Payment (BOP) 
• A lower CAD can boost Investor's sentiment and make India's currency more attractive in the market 
• Further, surplus in the Current account leads to flow of Foreign Exchange Reserves in the country and increase import cover 

• Reduce Trade deficit: Export led growth will further reduce trade deficit thus reducing dependency on foreign economies. It will strengthen “Self-reliant” (Atma Nirbhar) objective of the Government 

• Boost Domestic Manufacturing: It will provide boost to “Make in India” Initiative by encouraging import substitution of low-technology goods from countries like China, and pushing for local produce at lower prices

Challenges Associated with “Export Led Growth”: 

• Intra & Inter Regional disparities: As per Export Preparedness Index (EPI) released by NITI Ayog, intra & inter-regional disparities in export infrastructure acts as major bottleneck 
• Eg - Coastal states like Gujarat & Maharashtra forms major chunk of export share while landlocked states like Uttar Pradesh & Jharkhand lacks far behind 

• Poor R & D infrastructure: As per the index, several States lack in number of NABL accreditation research institutes thus the manufactured goods have less international level acceptance due to substandard & expensive products

• Environmental concerns: Countries putting impetus on “Green products” & curbing down “Carbon import” can severely dent India's exports prospects. Eg - Carbon Border Adjustment Mechanism (CBAM) law by European Union which can impact India's exports of Steel, aluminum etc 

• Competition by other developing countries: Various countries have exploited their cheap skilled  labor, minimum wages & industrial mechanisms to capture the market. Eg - Vietnam, Philippines, Bangladesh etc 

• Sector specific concentration of Exports: 

• As per Ministry of Commerce & Industry, while exports from the Service sector registered 30% growth in 2023, Merchandise sector experienced only 7% growth
• Also, Petroleum exports constitutes $97 billion of overall $775 billion exports registered in 2023, distantly followed by Pharmaceuticals ($19 billion). 

• Decline in Global demand: There is a de-globalisation trend because of ongoing geopolitical conflicts such as Russia-Ukraine war & repeated attack on trade bound ships in Red sea region by Houthi rebels. 

• Rise of Protectionism: “K-shaped recovery” and economic slowdown imposed by COVID has led to trade tensions with countries following Protectionist policy. Eg - US-China trade war, Brexit & Regionalisation of supply chains. 

Effective Steps taken to boost “Exports”:

• Production Linked Incentive (PLI): Government has launched PLI scheme to provide an incentive of 4-6% on incremental sales on goods manufactured in India. Eg - Solar PV Modules 

• Digital Economy: Promotion of Digital economy to leverage benefits of Internet of Things (IoT), Big Data analytics, Quantum Computing etc to create “Future oriented” products 

• Further, Digitisation of economy under DIGITAL INDIA initiative can lower the cost for smaller firms through automated IT systems for various approvals

• Promoting Export manufacturing in Tier-2 & Tier 3 cities: By creation of "Towns of Export Excellence" under Districts as Export Hubs (DEH) initiative

• Increasing Export competitiveness of Indian goods: Eg - Export Promotion Capital Goods (EPCG) scheme allows duty free import of capital goods for the purpose of export production in India. 

• This will lower down the cost of Indian capital goods and make them more competitive in the market. 

• Free Trade Agreements (FTAs): Eg- As per Ministry of Commerce, exports from India to UAE has increased by 16% in 2022-23 due to Comprehensive Economic Partnership Agreement (CEPA) 

• Encouraging Household Sector Investments: By promoting Financial literacy & encouraging households to channelise their savings to provide capital for domestic manufacturing. 

• Promoting Manufacturing led growth: Implementing policies to facilitate adoption of productivity-enhancing technologies such as Generative Artificial Intelligence (AI). 

• Climate oriented growth: Initiatives like PM-KUSUM & One World, One Sun, One Grid (OSOWOG) can be utilized to promote clean energy and reduce carbon emissions for export production 

Thus instead of adopting an “Inward looking” policies like USA & Europe, India shall put focus on boosting domestic manufacturing for “Export led growth”. At the same time creating a vibrant platform for the exporters to showcase their products and integrating them with the global supply chain is also imperative.