In the past few years, the slowdown in exports could be attributed at least in part to tepid global growth and falling trade intensity. Though export growth has recovered relative to the past few years, at 9.4%, it appears sedate compared with Vietnam’s 23.8%, South Korea’s 18.4% and Indonesia’s 17.8%. Come to think of it, India’s weak export performance cannot be attributed to global growth, which has trended up. Indeed, research shows that non-price factors play a greater role in explaining export growth vis-à-vis price factors such as the exchange rate in Brics countries. Thus, for sustained growth in exports, the government needs to address the structural issues plaguing labour-intensive sectors and iron out the GST-related disruptions that have hurt exports in the short run.

Source: Mint December 05, 2017 18:22 UTC