Indian international trade emerging trends and export promotion

Abstract

The historical title Golden Sparrow was accorded to India not because she had rich gold reserves but on account of favourable balance of trade, which allowed her to import gold and get paid in gold. Traders came to India to buy goods which ensured attractive prices and immediate settling of dues. The prosperity continued through Middle Ages till unwarranted administrative, military and civil expenses weakened the economy paving the way for advent of Britishers, who utilized India as source of raw material and market for finished goods. Independent India adopted system of planned economic development with restrictive imports. However, the high population growth generated the demand which could not be met from domestic capital and local produce. This made India look towards other economies for aid and support. The spurt in imports, mainly during 1970s and 1980s, with exports legging behind, created severe balance of payment crisis in 1991 necessitating reforms. A number of policy initiatives were taken to strengthen domestic sector and promote exports. As a result agriculture and industrial production improved and exports got a boost. Efforts to diversify export basket and expanded the market reach has shown good results. Value added exports of manufactured goods are replacing the traditional high volume low value exports. Services have also assumed prominent position in exports. However, we still need to do a lot in terms of capacity building (human resource development being one), industrial reforms, financial sector reforms, labor reforms and tax reforms so as to maintain the momentum of economic growth and bridge the widening trade deficit gap.