India's merchandise exports started off well in the first year of Sitharaman's tenure, reaching $310 billion back in 2014-15. However, after that, they have not been able to break the $300-billion annual barrier. Exports declined to $262 billion in 2015-16 and rose 4.7 per cent to $274 billion in the last financial year of 2016-17. The slowdown in global trade growth had been held responsible for this, along with a crash in prices of raw materials that India exports heavily, like processed petroleum, industrial metals, and meat.
On the other hand, Indian exporters have continued to raise the issue of falling competitiveness, loss of foreign market for strong sectors like apparel and engineering goods, and a growing trade gap with China, which they have flagged as a serious concern. They say the ministry should have been more forthcoming in addressing this concern. The trade deficit has reduced from $135 billion to $108 billion.
While successive economic surveys have pointed out labour intensive sectors like leather and apparel as an answer to this problem, little has moved on the ground. While the Rs 6,000 crore special package for the apparel and home furnishings sectors has been slow to take off, a similar one for the leather industry has remained an idea only on paper.
In July, the country witnessed 11 straight months of rise in outbound trade but export growth had slowed down significantly.
Finally, the Goods and Services Tax (GST) has hit exports hard with several changes to business norms brought in by the government later on. "The teething issues that were present after GST have been speedily looked into by the minister," Ganesh Kumar Gupta, president of exporters body FIEO, said.
Status quo on trade deals
India is currently negotiating at least 16 free trade agreements (FTAs) with nations or nation groupings. While the completion of new agreements has been painstakingly slow, voices from the industry say that existing trade deals, such as the ones with Japan or Korea, haven't benefited India.
One of the most important and ambitious deals, the Regional Comprehensive Economic Partnership with Asean nations and China, Japan, Australia and New Zealand, has bogged down due to disagreements over tariff reduction and market access. The same issues have been at the core of other trade discussions that had stalled as well, allowing critics to argue that a heavy-handed approach was being taken in trade negotiations.
However, India hasn't been at a disadvantage to get their point across during Sitharaman's tenure. Sachin Chaturvedi, director general at trade think tank RIS, said: "The trade negotiators have been proactive in dealing with the changing circumstances of the international stage."
Pushing for old demands at WTO
The country hasn't made much progress during Sitharaman's tenure at the World Trade Organization (WTO) on matters of international trade rules. India's long-standing demand for a permanent solution on stockpiling of food grain or a special safety mechanism for agriculture hasn't materialised.
Instead, discussions have become saddled with newer issues such as proposed global rules on e-commerce, which is supported by developed nations, and a Trade Facilitation Agreement (TFA) on investments pushed by China.
However, India has made some headway in drumming up support for a global TFA on services, which had been proposed by India. Expected to be on the lines of the current TFA in goods trade, the services proposal has been pushed by Sitharaman over the past year-and-a-half.
Foreign direct investments pouring in
The Department of Industrial Policy and Promotion (DIPP) is the nodal body responsible for drawing the framework of Foreign direct investment (FDI) policy in the country.
Under Sitharaman, it has managed to ease more than 87 FDI rules across 21 sectors to accelerate economic growth and boost jobs.
Since 2014, FDI reforms have been radically overhauled across traditionally sensitive sectors such as broadcasting, retail trading, air transport, rail infrastructure, and defence.
As a result, one of the key poll promises of Narendra Modi – that of attracting foreign capital for investments – has shown net positive results. Added to this, the successful marketing of Make In India by the DIPP globally has resulted in FDI inflows rising 23 per cent to $55.6 billion in 2015-16, creating a new record. In 2016-17, the figures were even higher at $60.08 billion.
According to government estimates, more than 90 per cent of FDI now flows into the country through the automatic route without needing clearances.
Demonetisation, GST cut down industrial growth
The June quarter GDP figures have surprised many by registering the lowest growth rate, at 5.7 per cent, since PM Modi was elected. Rising at the slackest of paces in more than three years, GDP has primarily dropped due to industrial growth being stifled.
The double whammy of GST and demonetisation has been difficult for the industry to bear. Restocking after GST implementation and a favourable base effect are likely to contribute to higher GDP and GVA growth in the remaining quarters, Aditi Nayar, principal economist at ICRA Ltd, said.
Nevertheless, the likelihood of growth surpassing seven per cent for the financial year has diminished after the recent readings, she said.
Easier to do business now?
This is tied to the ease of doing business in the country, which the government had made its pet theme in the process of cementing its business friendly image. While the Prime Minister had targeted breaking into the group of top 50 nations in World Bank's Ease of Doing Business global rankings, India managed to better its position by only a single rank (185 to 184) last year.
However, the DIPP continues to stress that business norms and license requirements have been cut down drastically in the country. Under Sitharaman, the department has created a similar ranking of states, which has resulted in the average time taken in starting a business and the number of formalities that go with it sharply dropping nationwide.
However, a recent NITI Aayog report showed that most end-users were not aware of these changes.