Characteristics & performances of exports in India

Yogesh m.

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Characteristics & performances of exports in India

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Abstract

India has registered outstanding growth performances in recent years. Its growth along with that of China has been anticipated to help sustain growth of global economy as economic prospects world over are not bright. Indian economy grew at more than
8% after 2003. India's trade has shown impressive increase at the growth rate of 11% after 1978 which is much above economy's growth rate. Its export share has grown from 0.4% to 1.2%. But still it is a minor in terms of its share. In spite of this, expectations are huge regarding India's growth, as China's expansion may be constrained by its rising cost and comparative disadvantage of geographical dividend with respect to India. India's trade restructuring has not been very intensive. Service trade is very important from India's perspective, as this also forms major chunk of economy. China on the other hand has focused more on manufacturing and hence been able to transform from low technology labor intensive to more technology and capital intensive goods. This difference is mainly because of role of foreign direct investment in China, which in turn was determined by overall business friendliness and openness to world economy. The outlook for trade of Indian economy is not very certain. India's trade has not undergone complete restructuring unlike China. It continues to depend upon exports of low skilled labor intensive goods. Moreover as India still spends huge amount of precious foreign exchange on import of energy needs, it is very risky because of price fluctuations.

Summary
Introduction
Efforts to integrate with the world economies
1. Export import (EXIM) policy
Export trends in India
1. Share of china and india in ASEAN's total imports
2. GDP growth rate of india vs world average
3. Goods and services traded
4. Openness of Indian economy: Trade to GDP ratio
5. Share of commodities in total exports
6. Share of labor intensive sectors in exports
7. Share of technology intensive trade in exports
Swot analysis
References

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[...] Further, huge fiscal deficits and low efficiency in tax collection reduce chances of decrease in tax rates. OPPORTUNITIES Scope of FDI: Patterns over the previous years suggest that owing to future opportunities, FDI has been continuously increasing. This reflects huge gains in terms of excellent managerial practices, transfer of advanced technology and good corporate government practices. Increasing average global incomes: Over the years national incomes of the various economies all over the world have been increasing owing to tremendous GDP growth rates. [...]

[...] SHARE OF CHINA (series1) & INDIA (series in ASEAN's TOTAL IMPORTS Although overall trade of India has increased but it has suffered trade deficit largely. Also share of manufactured goods in total trade has not increased while overall trade has rapidly increased. India's GDP growth has been remarkable after 1992 and it has surpassed global average quite satisfactorily as shown by the figure below where series 1 is India, series 2 is world average. GDP Growth Rate of INDIA(series1) vs WORLD AVERAGE(series2) India's trade performance has been impressive since 1978, after which its average growth rate in exports is huge 11%. [...]

[...] SHARE OF LABOR INTENSIVE SECTORS IN EXPORTS In spite of increase in proportion of more sophisticated manufactured items such as machinery and instruments, a much more is desired as its share went up from to just compared to that of China's 51%. SHARE OF TECHNOLOGY INTENSIVE TRADE IN EXPORTS Before 1990s India's trade was negligible with other Asian countries, with the exception of Japan. In the past decade India has strengthened its trade ties with ASEAN nations. In 80s, for example, only East-Asian country among top ten export destinations was Japan. [...]

[...] In current phase, exports and imports are not independent of each other. As an increase in exports raises national income which raises imports. Further, in most of the cases, exports are based on imported raw material, intermediate products and capital equipment. Hence imports may generate value added exports. Countries which prefer protectionist policies with high tariff and non tariff barriers often face similar retaliation from other countries. This was view was not so popular until a few decades ago. India and China were world's 1st and 3rd largest economies at the onset of industrial revolution i.e. [...]

[...] Funds shall be earmarked for Agri Export zones. A new scheme called Special agricultural produce scheme for the export of fruits, vegetables, flowers etc has been introduced. The state governments were encouraged for participation in promotion of exports; hence a new scheme was formulated named ASIDE EXPORTS TRENDS IN INDIA India has roughly completed 2 decades of economic reforms and economy has moved towards a more market based system. Its economy is said to become 3rd largest economy by 2050. [...]

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