India's Export Performance: A Comparative Analysis
Stanford King Center on Global Development Working Paper
Dr. Manmohan Singh, former Finance Minister and the chief architect of Indian Economic Reforms of 1991, had concluded in his seminal Oxford doctoral dissertation in the early sixties that openness in foreign trade was very important for India's development. Yet, until his significant reopening of India to foreign trade and investment in July 1991, India's export performance was spotty: stagnation until the sixties and again in the eighties interrupted by some significant growth in the mid-eighties. The paper, written in Dr. Singh's honor evaluates India's import performance in a comparative perspective. It confirms Dr. Singh's early assessment that India's domestic policies, rather than the external environment, are the dominant factors in its lack-luster performance. The future prospects are unlikely to be bright either unless infrastrucutural bottlenecks are removed by faster progress in privatization and by making it easier and profitable for private domestic and foreign investors to invest in the sector. A sensible exchange rate policy has to be pursued. The domestic financial sector has to be put on a sound footing with far reaching reforms. Labor and bankruptcy laws have to be amended to make entry and exit easier.