Why exports are crucial for India’s economic future?

What does Export mean?

Export means the transferring of any good from one country to another country in a legal way for the purpose of trade. Export goods are provided to the foreign consumers by the domestic producers.

Indian export:A history

The history of Indian exports is very old. During ancient times India exported spices to the other parts of the world. India was also famous for its textiles which were a chief item for export in the 16th century. Textiles and cotton were exported to the Arab countries from Gujarat. During the Mughal era India exported various precious stones such as ivory, pearls, tortoise stones etc. But during the British era, Indian exports declined as the East India Company took control of foreign trade.

Markets

Though India has seen some product diversification in its export basket, it has not expanded significantly in the two big markets-Africa and Latin America.
India’s business with South Asian countries is also negligible. This region has not been integrated with the global economy, though political and economic initiatives have been taken in the recent past in this direction.

Leading export items of india

In the past ten years, Indian exports have grown at a rate of nearly 22%. Some commodities have enjoyed faster export growth than others. Some of India's main export items are cotton, textiles, jute goods, tea, coffee, cocoa products, rice, wheat, pickles, mango pulp, juices, jams, preserved vegetables etc.

Overview

The share of the service industry accounts to around 54% of the annual Gross Domestic Product (GDP) of the country. Due to the development of science and technology, the number and quality of exports have also grown to a great extent which has led to favorable Indian economic growth.However there are some restrictions on the export of goods. Under sub section (d) of section 111 and sub section (d) of section 113, any good exported or attempted to be exported, contrary to any prohibition imposed by or under the customs act or any other law is liable for confiscation.
Due to the global late-2000s recession, both Indian exports and imports declined by 29.2% and 39.2% respectively in June 2009.[116] The steep decline was because countries hit hardest by the global recession, such as United States and members of the European Union, account for more than 60% of Indian exports.[117] However, since the decline in imports was much sharper compared to the decline in exports, India's trade deficit reduced to 25,250 crore (US$5.48 billion..

Why exports are crucial????

Exports play an important role in the economy.

· Increases sales and profits through new contacts(export sales may even excced local sales)

· Create market diversification and help to offset sales fluctuations in the local market.

· Contribute to increase production at optimum level and allow continue growth.

· Provide new opportunities and challenges to management.

Exports as a whole affect the industrial environment. To compete internationally, the industry standard for quality products, competitive price, good packaging, etc, which is important for overall industry. For export as a national priority for government and private sectors recognized by all agencies to export, export growth is to maintain high rates.

EXPORTS helps in enhancing the economic environment of a country and improves its image in the mindset of people.
Rising exports are a sign of a healthy and balanced economic situation which every country strives to achieve.

CONCLUSION

India needs the right mix of policy formulation sector focus and industry led initiatives to move up the value chain in the global export basket
The government should frame policies which gives boost to the exports.
The Indian goods have to be of superior quality. The packaging and branding should be such that countries are interested to export from India. At the same time India must look for potential market to sell their goods.

It is very clear that Indian exports have still not achieved their true potential and there exists immense opportunities for expanding the basket of India’s exports. With a strategic attention on the new markets that are evolving due to free trade, India is witnessing a boom in both manufacturing and services.

References

· http://www.tradechakra.com/indian-economy/exports/index.html

· http://en.wikipedia.org/wiki/Economy_of_India