R.S. Tiwari

Pressure of Domestic Demand and Export Performance in India

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EXISTING EXPORT TRENDS

It is significantly noticeable from the structure of India's existing exports that export-shares of machinery and transport equipments, groupwise, have shown a remarkable increase in 1975 (6.38%) over 1961 (0.58%)¹, whereas, export shares of most of traditional product exports, groupwise, have been revealed either stagnant, fluctuating or steadily deteriorating over time.

India has successfully pushed up its exports of machinery and transport equipment at a very fast rate i.e., as much as 5602.10 and 400.15 percentage points respectively in terms of percentage change and average growth rates.

The export of bicycles is observed to have boosted relatively at a rapid rate in terms of percentage change and average growth rates as compared to exports of coffee, cocoa, tea and mate, silk, cotton, motor cycles, radio receivers and sewing machines. Further,when annual compound growth rates of Indian exports grew by 11.61 per cent, bicycle exports witnessed a significant increase by 53.40 percentage points. However, despite the fact that India's exports, in terms of absolute value level registered a markable increase its relative export shares, fell down to more than a half in 1975 (0.5%) over 1961 (1.1%) level. This overall India's export-per- formance has partly been accompanied by trade diversion from western world markets to Eastern and Developing World markets and partly because of growing world-wide inflationary trend and emergence of Bangladesh as a new export market. The decline in relative export shares of India has also resulted from comparatively successive export performance embarked by the rest of the world. Annual compound growth rates of Indian exports, over the reference period increased by 11.62 per cent, whereas world exports (annual compound growth rates) went up by 20.05 percentage points. This trend is strong after the period 1971 when compound growth rates of Indian exports were only 22.08 per cent whereas world exports (compound growth rates) recorded a modest increase, i.e., 35.22 percentage points.

Although the general observation that India has been diversifying its export shares from western markets to East European and developing markets is valid³, in the case of bicycles it is not true. Bicycles, over the reference period, are being exported largely and invariably in the same old markets, viz; Iran, Afghanistan, Indonesia, Nigeria, the Netherlands, Singapore, Sri Lanka and the USA⁴. At the same time, bicycles are being increasingly recognised as one of the essential export-product in the group of engineering goods from the point of foreign exchange earnings in India. Hence in the light of these structural characteristics of Indian export trends it is necessary to proceed to literature review and problem setting.