Trends In India’s Exports: A Comparative Study Of Pre And Post Reform Period

Abstract

This paper analyzes the trends in India' s exports using the time series data for the period 1980-81 to 2010-11. Govt. of India introduced economic reforms since 1991 especially in the trade sector, therefore, in order to see the impact of economic reforms on India's export behavior, the whole time period has been divided into two sub-periods 1980-81 to 1991-92 (pre- reform period) and 1992-93 to 2010-11 (post-reform period). study shows that India's exports performance improved significantly during the post -reform period and there has been a perceptible change in the value, composition and direction of India's exports. Though the volume and value of exports has increased manifold, India's share in the world exports is still not up -to the expectation. Keyword: Economic Reforms, Economic Growth, India's Exp orts, Liberalization, Openness. I. Introduction Exports have acquired added significance in the wake of liberalization wave sweeping across the world. trend towards market economy in almost all the countries of world has increased the role of exports in developmental efforts. Therefore, exports constitute a key factor in economic development of a country. For a developing country, it is essential to build up a sizeable export surplus. rate of economic growth is largely determined by the rate at which a country can expand its export capacity. Higher rates of economic growth tend to be associated with higher rates of export growth. A country that tries to promote growth while ignoring its export performance may succeed in the short -run, but it will be hard- pressed to sustain growth over a long period of time. Thus, it can be concluded that exports are a key factor in the growth process, not one of political astrology but of empirical fact. major concern of the government in the past was restriction o f imports with a view to controlling the trade deficit and protection of domestic industries against foreign competition. Imports were, therefore were very much restricted by prohibition of imports of many few items, import licensing, very high import duties and foreign exchange restrictions. foreign trade policy was characterized by the overtone of negativism. Beginning mid -1991, the Government of India introduced a series of reforms to liberalize and globalize the Indian economy. Reforms in the external sector of India were intended to integrate the Indian economy with rest of the world. In this context, the Ninth five year plan (1997-2002) observed, The process of globalization is a reality which cannot be denied and also should not be avoided. Howe ver, it needs to be managed so that we can derive the maximum advantage from the world markets. Reforms of trade and exchange rate policy were a critical element in the process of structural reforms. Since the initiation of economic reforms, Indias outward orientation has increased considerably. major trade policy changes in the post -1991 period included simplification of procedures, removal of quantitative restrictions and substantial reduction in tariff rates. A significant development in the current account of balance of payments in the 1990s was the remarkable growth in the exports of invisibles to the rest of world. This was made possible by unfrequented growth in information and communication related services like computer software, hardware, internet, e - commerce and telecommunication sector. economic reforms process introduced since 1991 with focus on liberalization, openness, transparency and globalization has enabled increased integration of the Indian economy with the rest of world. growth rate of Indias trade is increasingly dependent on exogenous factors such as world trade growth (especially those of the trading partners), international price changes and development in the competitor countries. Cross currency exchange rates as well as dollar rupee exchange rate movements also get reflected in the performance of Indias trade. Indias approach to openness has been cautious, contingent on achieving certain pre - conditions to ensure an orderly process of liberalization and ensuring macro -economic stability. This approach has been vindicated in recent years with growing incidence of fina ncial crisis in the world economy. Over and above, the entire policy regime in India with regard to liberalization of