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Feasibility of export led growth for India - Coggle Diagram
Feasibility of export led growth for India
What are exports?
Exports are goods and services that are produced in one country and sold to buyers in another.
Exports, along with imports, make up international trade.
Why export led growth is needed?
Domestic-demand led growth and its limitations
requires more public spending, tax cuts, private investment, and/or financial sector reforms
Problem of household debt
Limited income growth and low wages
Unskilled labour exports
India’s market is too small
Under-exporting relative to its labour force
Openness of economy is important
Unskilled exports requires more not less openness
Need to be internationally competitive
Import contribution to exports ex. heavy machineries from China
To increase competitiveness
Other advantages
Rise in Income
Increase in investment
Sector specific growth can be achieved
Reasons for India’s Underperformance
Low Level of Participation in Global Value Chains
Low Market Penetration in High-Income Countries
High diversification combined with low specialization in export
Domestic factors like lack of infrastructure, policies etc.
Why export led growth is not so easy?
Problem of four Ds viz: depopulation, declining productivity, high debt, and deglobalization.
Cheap imports available
Market-Reforms, No Longer to be Panacea
Competition from Neighbourhood
Structural Issues like sector specific un-skillfulness etc.
Security Imperative and lack of domestic resources
Way Forward
Building Domestic Demand
Focus on Knowledge Power
Addressing Structural Issues
Economic Decentralisation
Providing Easy Credi
Trade Liberalisation
Becoming Part of GVC
Policy Stability