Exports: Growth Momentum

The pace of India’s export growth has not been distinctly high in the most part of the post-reform period, but it has accelerated in the last five years. India’s share in world exports has now crossed 1 per cent.

During the period from 2002-03 to 2005-06, India’s merchandise exports grew by as much as 25 per cent per annum. Exports of services, in particular, showed an exceptional performance growing at the rate of 45 per cent per annum. Growth of merchandise exports remains high at 22 per cent per annum even if petroleum exports are excluded from the total. It is significant that the high export growth occurred despite the appreciation of real effective exchange rate (36 country bilateral export weights) by about 1 per cent per annum during these four years. The latest (provisional) data indicates that the growth momentum of the previous four years continued, by and large, in 2006-07. The cumulative value of India’s merchandise exports in 2006-07 was $ 124.6 billion (provisional) as against $ 100.6 billion (provisional) in 2005-06. The growth rate of merchandise exports in 2006-07 over the previous year, on a like to like basis, is 23.8 per cent. This has been attained in spite of the appreciation of the real effective exchange rate by about 2.8 per cent during April-January of 2006-07.