Indian Technology Exports and Technological Development

Abstract

Exports of technology by developing countries can serve as an indicator of their technological development and its effect on changing their comparative advantage in international trade. This article concentrates on technology exports by India, a country that has built up a substantial industrial base but that has suffered from slow and erratic economic growth and has persisted in a policy of inward-looking industrialization. It argues that India is the leading exporter of industrial technology in the Third World, in terms of the range, diversity, and complexity of the technologies it sells, and traces this mainly to the strategy of the Indian government to foster technological "learning" in the capital goods sector of the economy. Thus, while its highly protectionist strategy has created various inefficiencies, it has also led to the creation of substantial technological capability in the country. Other developing countries have much to learn—both positive and negative— from the Indian experience.