India’s Trade Gap Stems from Firm Capability Deficit, Experts Say

India’s persistent trade deficit has reached alarming levels, and a new report by The Policy Edge attributes the shortfall to a widespread deficiency in firm capabilities. The convergence of limited access to technology, skill gaps, and lack of scalable production models is cited as the main driver behind the country’s inability to compete on the global stage.

The study highlights that many Indian manufacturers operate with outdated processes and low productivity, making their goods less attractive in international markets. Meanwhile, foreign competitors enjoy advanced manufacturing techniques, higher quality standards, and better access to finance. The disparity not only widens the import-export gap but also hampers overall economic growth.

Experts argue that closing the capability gap could reduce the trade deficit by up to 15% over the next five years. They recommend a comprehensive policy mix that includes increased investment in research and development, workforce training, and incentives for technology adoption. Policymakers and industry leaders are urged to act swiftly to build a more resilient and export‑oriented industrial base. Source: Google News – Manipal.