Exports, Imports and Economic Growth in India
Name- Neha Gujar
Literature Review
1. Exports, Imports and Economic Growth in India
India entered the era of trade reforms in 1991 and is moving gradually towards an open economy. export and import growth are crucial in providing the impetus for economic growth in developing countries and imports provide the important ‘virtuous’ link between trade and output growth. Our aim, here, is to address the export/import-led growth and growth-driven export/import hypotheses for India. The results clearly show that exports and imports Granger-cause GDP, both individually and jointly.
(László Kónya & Jai Pal Singh, 2006)
2. Exports, imports and economic growth in India: Evidence from cointegration and causality analysis
To study import, export and economic growth in India Johansen’s Co-integration and Ganger Casuality tests were employed in the empirical analysis using ADF and DF tests. The results of the Granger causality test show that there is bidirectional causality running between exports and economic growth as well as imports and economic growth. Therefore, the study confirms that there is bidirectional causality has been found between exports and economic growth which supports export-led growth and growth-led export hypothesis. However, this study finally suggests that both growth as well as export promotion strategy are to be pursued consistently with an emphasis on sustainable and inclusive growth.
(Raju GUNTUKULA, 2018)
3. 2008 Global Economic Crisis and Its Impact on India’s Exports and Imports
Indian economy has been integrated with the global economy. This integration enabled India to move on high growth path. But India’s share in the world trade is less than 2 per cent. India’s vision in the world trade is not only earning foreign exchange but also to induce the economic growth and development so that India is trying to increase its exports. But the 2008 global economic crisis has hindered this effort. Since the globalization, it is explicit that the shocks in the world economy may affect the Indian economy also. There is a need to assess those effects on our economy is the need. (Sivakumar, Marimuthu, 2012)
4. India Exim Bank’s Export-Import Operations as a Driver of Economic Growth
Exim Bank of India as a development bank in India. provides comprehensive and permanent financing of export-import operations and provides support to potential exporters. Analysis of change in bank’s loans portfolio. its geographic priorities, export-import operations, and other activity characteristics. It was concluded that the Bank provides a significant part of loans to the Indian businesses, the Bank’s export-import operations make a significant contribution to the economic growth of India. (Sergey Sergeevich Matveevsky, 2022)
5. Exports, imports and economic growth in India: An empirical analysis.
The study findings confirmed the long-run relationship among exports, imports and economic growth and also reported that there is a unidirectional causality in short-run and in the long-run, author confirmed that there is a bidirectional causality relationship between economic growth and exports; and exports and imports. Finally, the study results indicate that both exports and imports increase economic growth in India. (K. Krishna REDDY, 2020.)
6. Causality between Indian Exports, Imports, and Agricultural, Manufacturing GDP
Singh and Kónya studied the relationship between Indian GDP, exports, and imports from 1950/51 to 2003/2004. A logical further step is to investigate the same issue for two major sectors of the Indian economy: agriculture and manufacturing in particular, agricultural GDP causes imports, exports cause agricultural GDP. There is also some evidence for agricultural GDP causing exports, and imports causing agricultural GDP. These results are sensitive to model specification. There is also some evidence for manufacturing GDP causing imports, but this result is also sensitive to model specification. (László Kónya & Jai Pal Singh, 2007)
7. The Dynamics of the Relationship between Imports and Economic Growth in India
The relevance of export-led growth hypothesis in India has been the major issue of many empirical studies. This article is an attempt to investigate the dynamics of the relationship between imports and economic growth in India for the period 1970-1971 to 2009-2010. Using time series techniques such as vector error correction estimates and Granger causality tests, we show the existence of a two-way relationship between import growth and income growth in the long run. (P. K. Mishra, 2012)
8. The Dynamics of Relationship between exports and economic growth in India
There are various approaches to achieve this target of growth of gross domestic product and which one strategy is to promote exports of the country. this paper is an attempt to reinvestigate the dynamics of the relationship between exports and economic growth for India over the period 1970 to 2009. Applying popular time series econometric techniques of cointegration and vector error correction estimation, the study provides the evidence of stationarity of time series variables, existence of long-run equilibrium relation between them, and finally, the rejection of exported growth hypothesis for India by the Granger causality test based on vector error correction model estimation. (P. K. Mishra, 2011.)
9. Determinants of Import Intensity of India’s Manufactured Exports Under the New Policy Regime
The industry-level analysis indicates that the increase in import intensity of manufactured exports is attributable partly to changes in product composition of exports and partly to growing export orientation of Indian manufacturing industries. Firm-level econometric analysis reveals that exporting firms are more import intensive than non-exporting firms. A significant positive impact of export intensity on import intensity of firms is clearly indicated. The econometric results also show that firms’ decisions to import and export are interdependent. Both decisions may be rooted in firm heterogeneity. (Goldar, Bishwanath, 2013).
10. What Causes Trade-led Growth in India?
On using different measures of both trade and economic growth variables, a unidirectional causality has been found from trade to economic growth. It is concluded that in India the most important sources of causation from trade to economic growth have been externalities generated by the export sector and a relatively higher productivity of the export sector, while no evidence is found in Favour of a positive impact of knowledge spillovers generated by trade on economic growth. (Ruchi Gupta, 2011.)
11. Conclusion
The study shows that Imports and Exports cause growth both individually and jointly. There is bidirectional Casuality between exports-economic growth and Imports economic growth. India is trying to increase its Exports to earnings foreign exchange and induce economic growth. India’s Exim Bank’s Import-Export operations make a significant contribution to the economic growth of India. Industry level analysis reveals Exporting firms are more intensive than non-exporting firms. Firm’s Decision to Imports and Exports are independent. study concluded that in India the most important sources of causation from trade to economic growth have been externalities generated by the export sector and a relatively higher productivity of the export sector.
References
1. Goldar, Bishwanath, 2013. “Determinants of Import Intensity of India’s Manufactured Exports Under the New Policy Regime,” Indian Economic Review, Department of Economics, Delhi School of Economics, vol. 48(1), pages 221-237.
2. K. Krishna REDDY, 2020. “Exports, imports and economic growth in India: An empirical analysis,” Theoretical and Applied Economics, Asociate General an Economist Lor din Romania – AGER, vol. 0(4(625), W), pages 323-330, Winter
3. László Kónya & Jai Pal Singh, 2006. “Exports, Imports and Economic Growth in India,” Working Papers 2006.06, School of Economics, La Trobe University
4. László Kónya & Jai Pal Singh, 2007. “Causality between Indian Exports, Imports, and Agricultural, Manufacturing GDP,” Working Papers 2007.02, School of Economics, La Trobe University
5. P. K. Mishra, 2011. “The Dynamics of Relationship between exports and economic growth in India,” International Journal of Business and Economic Sciences Applied Research (IJBESAR), International Hellenic University (IHU), Kavala Campus, Greece (formerly Eastern Macedonia and Thrace Institute of Technology – AmaTech), vol. 4(2), pages 53-70, August
6. P. K. Mishra, 2012. “The Dynamics of the Relationship between Imports and Economic Growth in India,” South Asian Journal of Macroeconomics and Public Finance, , vol. 1(1), pages 57-79, June.
7. Raju GUNTUKULA, 2018. “Exports, imports and economic growth in India: Evidence from cointegration and causality analysis,” Theoretical and Applied Economics, Asociate General an Economist Lor din Romania – AGER, vol. 0(2(615), S), pages 221-230, Summer.
8. Ruchi Gupta, 2011. “What Causes Trade-led Growth in India?,” Margin: The Journal of Applied Economic Research, National Council of Applied Economic Research, vol. 5(3), pages 293-310, August
9. Sergey Sergeevich Matveevsky, 2022. “India Exim Bank’s Export-Import Operations as a Driver of Economic Growth,” Russian Foreign Economic Journal, Russian Foreign Trade Academy Ministry of economic development of the Russian Federation, issue 1, pages 39-52, January.
10. Sivakumar, Marimuthu, 2012. “2008 Global Economic Crisis and Its Impact on India’s Exports and Imports,” MPRA Paper 40950, University Library of Munich, Germany.