GROWTH BEHAVIOUR OF TOTAL EXPORT OF INDIA DURING THE RECENT YEARS

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1 Volume 3, Issue 5 (May, 2014) Online ISSN Published by: Abhinav Publication Abhinav International Monthly Refereed Journal of Research in GROWTH BEHAVIOUR OF TOTAL EXPORT OF INDIA DURING THE RECENT YEARS Kiran Dhanju 1 Research Scholar, Chaudhary Devi Lal University, SIRSA, India kamboj090@gmail.com Dr. Poonia Usha 2 Teaching Associate, Chaudhary Devi Lal University, SIRSA, India ushapoonia12@gmail.com Shakuntala Sihag 3 Teaching Associate and Research Scholar, Chaudhary Devi Lal University, SIRSA, India shakuntlasihag@gmail.com ABSTRACT Exports are the basis of the overall growth performance of any country. By increasing the rate of exports, any developing country can pave a way for the development by earning international liquidity thereby; sort out the problem of reserves to start up of any project to come out the circle of poverty. So, it becomes a paramount importance for the country like India to start export promotion measures to boost up the pace of its exports and India has already taken many steps to increase the level of its exports. How far, it has succeeded, has undertaken in the present study for the time from to by collecting secondary data from Handbook of Statistics on Indian Economy. It is concluded from the results of the study that Cotton raw including waste, iron ore, plastic and linoleum and transport equipment has been observed as the products in which exports have been increased at the maximum rate, whereas exports of Tea, Iron and steel, Mica and Leather and Manufacturing have been identified as the area in which satisfied results have not been achieved. So, it is suggested by the results of study that government should promote exports of different sectors by providing different incentives to different sectors to avail the opportunity and fill up the gaps as well. Keywords: Export; Performance; Agricultural; Industrial INTRODUCTION Exports of any country play an important role in the economy. Exports act as a motivating force to speed up the growth process of the developing country like India. So, Exports act as a foundation for the economic growth in developing countries like India. Exports measure the amount of goods or services that domestic producers provide to foreign consumers. It is a good that is sent to another country for sale. (May Peters and Farhan) The growth rate of an economy is directly related to exports. If exports increase at a faster pace as compared to imports, nothing can stop an economy from being a developed one. Exports are a component of aggregate demand (AD). Rising exports will help to increase AD and cause higher economic growth. India's GDP growth rate in exports is a strong factor contributing to GDP increases Available online on 1

2 constantly day by day. India's economy has performed well in recent years after the country began to open in 1991 and India's position has improved after the inception of the WTO also as far as Export of the country is considered. (Farhan) Exports in India are reported by the Ministry of Commerce and Industry, India. Total Exports of India in has been registered as and the growth rate of exports has been found as (-) (Pratiyogita Darpan Series-1) The present study entitled Growth Behaviour of Total Export of India during the Recent Years tries to examine the growth patterns of exports of principle commodities of India. This paper analyzes the importance of export as a contributing factor to economic growth in India. The specific objective taken for the present study is to examine growth performance of India s Export during last 15 years ( to ). OBJECTIVES 1. To examine the export performance of Agricultural products of India during recent years. 2. To analyse growth behaviour of different industrial products of India during recent years. METHODOLOGY To fulfill the stipulated objective, Secondary data have been taken for the exports of principle commodities for the study period to The data of India s exports have been collected from Handbook of Statistics on Indian economy published by the Reserve Bank of India. Various agriculture and allied products, manufactured goods, textile and textile products, Handicrafts, other manufactured goods, and other commodities have been taken to study the exports of agricultural products of India with different countries. Analytical techniques for examining the growth performance of India s export: Compound growth Rate of different export products has been worked out by fitting exponential function. Using the least square method, the following form of exponential function has been used to calculate Compound Growth Rate. Y =AB t Where, Y= Export A= Constant B= 1+r r =Compound growth rate t =time variable in years (1, ) The compound growth rate (r) is equal to (B-1) x 100. In log form B has been calculated by the following formula: Log B = T log Y - t log Y/N t 2 ( t) 2 /N The growth rates have been tested for significance by calculating value where t = r/s, s is the standard error. The value of standard error has been calculated by following formula: S.E. (r) = 100B (log Y) 2 - ( log Y) 2 /N (log10 b ) 2 T 2 Log 10 e (N-2) T 2 VOL. 3, ISSUE 5 (May 2014) 2

3 Where T= t t RESULTS AND DISCUSSIONS The results related to the growth behaviour of the exports of agriculture and allied products, ores and minerals, manufactured goods, engineering goods, textiles and textile products and other goods is discussed through following tables. Table 1. Growth performance of agriculture and allied products and ores and minerals Compound growth rate 1. Primary Products A Agriculture and Allied Products (a) Tea 4.72 (b) Coffee 6.59 (c) Rice (d) Wheat 0 (e) Cotton raw including waste (f) Tobacco (g) Cashew including Cashew nut shell liquid 5.50 (h) Spices (i) Oil Meals (j) Fruits and Vegetables (k) Processed fruits, juices, miscellaneous processed items (l) Marine Products 7.32 (m) Sugar and Molasses (n) Meat and meat preparations (o) Other Agriculture and allied products Ores and Minerals a. Iron Ore b. Mica c. Other Ores and Minerals In table 1, Compound Growth Rates of Agriculture and allied products and ores and minerals are shown for the study period ( to ). Regarding agricultural and allied activities, the maximum growth rate in exports has been observed in case of the Cotton raw including waste (47.52 percent) whereas Minimum Growth rate in exports has been found in the Tea (4.72 percent) of AAP and Cashew including Cashew nut shell liquid (5.50 percent) and Marine products (7.32 percent). There has been zero growth rate in Wheat. The Growth rate of exports of Coffee has been observed as 6.59 percent The Growth rate of exports of rice during the study period has been observed as percent and that of Tobacco is percent and growth rate of exports of Spices is percent and that of Oil Meals is percent. The growth rate of exports of Fruits and Vegetables has been observed at percent and that of Marine products has been observed as 7.32 percent. The growth rate has been observed in case of Sugar and Molasses as percent, followed by meat preparations (21.98 percent) but are less as compared to Cotton raw including waste. The overall growth rate in the exports of ores and minerals has been observed in Iron ore as percent and there are other ores and minerals in which growth rate in exports has been found as percent but this increase has been noticed less than the increase in Iron ore. As far as the minimum growth rate is considered in exports of ores and minerals, it has been found in Mica with percent during the study period. VOL. 3, ISSUE 5 (May 2014) 3

4 Table 2. Growth performance of manufactured goods and engineering goods Compound Growth Rate Manufactured Goods A. Leather and Manufactures 8.87 B. Chemicals and Related Products (a) Basic Chemicals, Pharmaceuticals, & Cosmetics (b) Plastic and Linoleum Products (c) Rubber, Glass, Paints, Enamels, & Products (d) Residual Chemicals and Allied Products Engineering Goods (a) Iron & Steel (b) Manufacture of Metals (c) Machinery & Instruments (d) Transport Equipment (e) Electronic Goods (f) Other Engineering Goods The furnished results related to the growth behaviour of export in terms of the manufactured goods are presented through table 2. The figures in the table reveal that the maximum growth rate in exports of manufactured goods has been observed in plastic and linoleum products (20.79 percent) followed by basic chemicals, pharmaceuticals and cosmetics (19.19 percent). Although growth rate in exports of chemicals and related products has been observed at percent, but it has registered the growth which has been found less than basic chemicals, pharmaceuticals, and cosmetics i.e percent and plastic and linoleum products i.e percent. The growth rate in exports of rubber, glass, paints, enamels and products has been observed at percent and it has remained percent in the case of residual chemical and allied products. The minimum growth rate of exports has been observed in leather and manufactures with 8.87 percent. So, positive increase has been noticed in case of all the items related to manufacturing goods. There has been a significant positive trend in the case of all the items related to the engineering goods. The maximum growth rate in exports has been observed in the Transport Equipment as percent, followed by other Engineering Goods with percent. Almost equal growth rate has been observed in machinery and instruments as percent and that of electronic goods percent. Other Engineering goods in which almost equal growth rate in exports has been observed are Iron and Steel is percent and manufacture of metals with percent and both of these Engineering goods also have minimum growth rates in exports i.e. Iron and Steel (29.09 percent) and manufacture of metals (20.03 percent). Table 3. Growth performance of textile and textile products and other goods Compound Growth Rate Textile and Textile Products 9.25 (a) Cotton Yarn, Fabrics, Madeups, etc (b) Natural Silk Yarn, Fabrics, Madeups, etc. incl. Silk Waste 4.00 (c) Man-made Yarn, Fabrics, Madeups, etc (d) Man-made Staple Fiber (e) Woolen Yarn, Fabrics, Madeups, etc (f) Ready-made Garments (g) Jute & Jute Manufactures 9.20 (h) Coir & Coir Manufactures (i) Carpets 5.17 (1) Carpet Handmade 7.92 (2) Carpet Mill made 0 (3) Silk Carpets VOL. 3, ISSUE 5 (May 2014) 4

5 Table 3. Growth performance of textile and textile products and other goods (Contd.) Compound Growth Rate Other goods Gems and Jewellery Handicrafts (excluding handmade carpets) Other Manufacturing Goods Petroleum products Others The growth behaviour of textile and textile products is reflected though the table 3. Once again, there has been noticed a significant growth trend at one per cent level of significance. Man-made staple fibre has been noticed as the product in which maximum growth has been noticed with percent. The growth rate in exports of man-made yarn, fabrics, Madeups, etc. has been observed at percent, but has remained less than man-made staple fibre (30.00 percent). The growth rate of ready-made garments has been observed at percent. The minimum growth rate of exports has been observed in Natural silk yarn, fabrics, Madeups etc. incl. silk waste (4.00 percent) followed by cotton yarn, fabrics, Madeups, etc. (5.33 percent) and carpets (5.17 percent). No growth rate in exports has been observed in carpets Mill made. Negative trend has been observed in silk carpets as percent. There are some other textile products like coir and coir manufactures in which growth rate of exports has been observed as percent. The maximum growth rate of exports has been observed in petroleum products which have been estimated at percent and there are some other goods in which growth rate of exports has been observed at percent. The growth rate of exports of other manufacturing goods has been observed as percent and growth rate of exports of gems and Jewellery has been found as percent. The negative growth rate of exports has been observed in handicrafts (excluding handmade carpets) with the value of percent. CONCLUSIONS It may be concluded on the basis of the above discussion that the maximum growth rate in exports has been observed in Cotton Raw including Waste, Iron ore, Plastic and linoleum and transport equipment. More efforts are needed to increase the growth rate of exports of these products as these products can be seen as the opportunity to increase the level of exports of India. Less exports have been found in Tea, Iron and steel, Mica, and Leather and Manufactures. So, much more efforts are needed to increase the exports of these products in large scale. So, it is suggested by the major findings of the study that more incentives should be provided by the Government to promote exports of different sectors of India so that the opportunities can be availed by the India s exporters. In this regard, some policy implications have been put forth by our study results: Policy Implications: 1. The Indian government will have to evolve a comprehensive long term strategy, which can be formulated only on the basis of an extensive study of consumer preferences in terms of style, colour, design etc. 2. There is an urgent need for the technological upgradation of export industries. 3. There is an urgent need for the improvement in the quality of product, standards and packaging. 4. There has been emerged an urgent need of promoting diversification of agriculture. 5. Indian government should provide special incentives for the gems and jewellery sector. 6. There should be given more incentives in the specialization of handloom goods, improve market access information. VOL. 3, ISSUE 5 (May 2014) 5

6 7. Government can evolve support scheme for leather manufacturing units that implements pollution measures. 8. There should be better provision for special incentives for the gems and jewellery sector. REFERENCES 1. Irwin, D.A., and M. Tervio (2002), Evidence from the Twentieth Century, Journal of International Economics, Vol. 58 (1), pp Balassa, Bela. (1978), Exports and economic growth: Further evidence, Journal of Development Economics, Vol. 5 (2), p Feder, G. (1983), On Exports and Economic Growth, Journal of Development Economics, Vol. 12 (1/2), p Kavoussi, R.M. (1984), Export Expansion and Economic Growth: Some Further Empirical Evidence, Journal of Development Economics, Vol. 14 (1-2), p Kravis, I.B. (1970), Trade as Handmaiden of Growth: Similarities between the Nineteenth and Twentieth Centuries, Economic Journal, Vol. 80 (320), p Nurkse. R. (1962), Patterns of Trade and Development, Wicksell Lectures 1959, Oxford. 7. Tyler, W. (1981), Growth and export expansion in developing countries: Some empirical evidence, Journal of Development Economics, Vol. 9 (3), p Sen, A K. (1962), An Aspect of Indian Agriculture, The Economic Weekly, Vol. 14 (4-6), pp Anonymous (2005), Cashew Statistics, Cashew Bulletin, Vol. 43(3) (13-17). 10. Arvind, K. (2000), Performance of India s Rice Export M.Sc. (Agri) Thesis, University of Agricultural Sciences, Bangalore. 11. Ashalatha (2000), Export Trade Performance of Indian Cashew M.Sc. (Agri.) Thesis, 12. University of Agricultural Sciences, Bangalore. 13. Balasubramanian, P.P. and Singh, H.P. (2002), Global Cashew Production and Trade 14. Vis-à-vis India s Participation Indian Cashew Issues and Strategies, p Behura, D. and naik, D. (1997), Growth of Cashew Production in India with Special Reference to its Export Opportunities Indian Journal of Agricultural Marketing, Vol. 11 (1&2), p Hegde, I.N. (1998), Foreign Trade in India s Economic Growth - A Quantitative Analysis Ph.D. Thesis, Karnataka University, Dharwad. 17. Nageshwara M R and S Srinivas Rao (2009), Direction of Trade in Indian Agricultural Commodity Exports, Southern Economist, Vol. 47 (19), pp Singh, Kehar & Inder Sain (2003), Prospects of Agricultural exports of India: A Composite Index Approach Indian Journal of Agricultural Economics, pp Goldar Biswanath (1989), Determinants of India s export performance in engineering products (www) Developing economies. Available from Findlay and Ronald (1985), Primary export, manufacturing, and development, The Primary Sector and Economic Development, London, Croom Helm, pp Tilton, John E. (2003), Creating wealth and competitiveness in mining, Mining Engineering VOL. 3, ISSUE 5 (May 2014) 6

7 24. dailyojo.com/articles/the-importance-of-exports-in-an-economy.html 25. foran.hubpages.com/hub/exportscountryplayimportantrolehttp:// 4/trade/importance-of-exports-to-the-economy/ VOL. 3, ISSUE 5 (May 2014) 7

STRUCTURAL CHANGE IN COMPOSITION OF INDIA S EXPORT DURING POST-ECONOMIC REFORM PERIOD Manoj Kumar Sinha

Business Analyst, ISSN 0973-211X, 37(1) 99-116, SRCC STRUCTURAL CHANGE IN COMPOSITION OF INDIA S EXPORT DURING POST-ECONOMIC REFORM PERIOD Manoj Kumar Sinha ABSTRACT The composition of India's foreign