From Torrid to Tepid: India's Exports in the 21st Century

The Ashoka Economics society is delighted to have Dr. Arvind Subramanian and Dr. Shoumitro Chatterjee for the next session of the 'Indian Economy Webinar Series'. They will be presenting their paper titled "From Torrid to Tepid: India's Exports in the 21st Century".

Abstract: This paper presents a series of facts about India’s export performance in this century. In the first, pre-global financial crisis (GFC) decade, exports grew at nearly 20 percent a year and across the broad—agriculture, minerals, manufacturing, and services—accounted for equally by buoyant world demand and rising domestic productivity, the latter reflected in global market share gains. Post-GFC, export growth collapsed, with only modest gains in global market share.  Post-GFC, India could not occupy the space vacated by China because of a historically dismal performance in unskilled labor-intensive exports. Looking ahead, India faces poor export prospects because of the “2 Lewis Curves challenges” it has been unable to exploit the horizontal portion of this curve in unskilled manufacturing (as China has done), while the curve for skilled services has already started turning up. India has responded to these developments by turning protectionist. In the wake of the global backlash against globalization combined with weak domestic growth, India's choices are stark: modest trade and modest overall growth or re-invigorated trade and growth. The latter will entail hard policy choices and changes.

Arvind Subramanian is a Professor at Ashoka University and Director, Ashoka Centre for Economic Policy (ACEP). He is a Senior Fellow at PIIE, and the Former Chief Economic Advisor to the Govt. of India. Shoumitro Chatterjee is an Assistant Professor of Economics at The Pennsylvania State University & was a Non-Resident Visiting Scholar at the Centre for the Advanced Study of India, UPenn. He was previously an Economist at the Office of the Chief Economic Advisor of India, 2015-2016.