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The Performance of India’s Merchandise Exports: An Analytical Perspective

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India’s Contemporary Macroeconomic Themes

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Abstract

India’s external sector recovered magnificently from the crisis of 1991, after economic reforms were put in place. However, of late, the health of India’s external sector raises some concerns. In this paper, we focus on the performance of India’s merchandise exports. The assessment of export performance is done in the context of (i) price competitiveness of India’s exports; (ii) level of economic activity in the rest of the world; (iii) composition and diversification of exports; (iv) import intensity and technology embedded in exports; and, (vi) direction of exports. The econometric analysis dealing with the determinants of exports uses quarterly data for the period 1996-97Q1 to 2021-22Q4, as the quarterly GDP data for India for the period prior to this are not available. The paper uses the time-series analysis: Unit Root Tests, Cointegration, and Vector Error Correction methods in the econometric analysis.

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Notes

  1. 1.

    See World Development Indicators, World Bank.

  2. 2.

    Source: Handbook of Statistics of the Indian Economy, Reserve Bank of India.

  3. 3.

    Source: OECD.Stat Metadata Viewer, https://stats.oecd.org/index.aspx?queryid=350.

  4. 4.

    Source: Ministry of Statistics and Planning, Government of India.

References

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Acknowledgements

I would be failing in my duties, if I do not acknowledge the help provided to me by Dr. Aditi Chaubal, Arundhati and Aswathi. I am grateful to Prof. Dr. K. R. Shanmugam for including me in this prestigious conference and to the participants for their feedback. My special thanks to Ms. Jothi for her kind considerations in extending my deadlines. Needless to mention that error in the paper, if any, are attributable solely to me.

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Correspondence to Pushpa Trivedi .

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Annexure 1: Vector Error Correction Estimates

Annexure 1: Vector Error Correction Estimates

Sample (adjusted): 1996Q4 2021Q4

Included observations: 101 after adjustments

Standard errors in ( ) & t-statistics in [ ]

Cointegrating Eq:

CointEq1

   

XI$R_SA(−1)

1.000000

   

REER36T_SA(−1)

−19.82577

(4.18921)

[−4.73257]

   

YW15$(−1)

−15.10570

(6.41291)

[−2.35551]

   

GDPFC11_12_SA(−1)

6.470698

(2.12846)

[3.04008]

   

C

260.5861

   

Error Correction:

D(XI$R_SA)

D(REER36T…

D(YW15$)

D(GDPFC1…

CointEq1

0.008799

0.012083

0.002643

0.001695

(0.01271)

(0.00253)

(0.00203)

(0.00477)

[0.69227]

[4.76854]

[1.30288]

[0.35580]

D(XI$R_SA(−1))

0.195831

0.001898

0.042292

0.036615

(0.13125)

(0.02617)

(0.02095)

(0.04920)

[1.49209]

[0.07253]

[2.01896]

[0.74416]

D(XI$R_SA(−2))

0.041492

0.005335

−0.005562

0.036460

(0.13638)

(0.02719)

(0.02177)

(0.05113)

[0.30425]

[0.19622]

[−0.25554]

[0.71313]

D(REER36T_SA(−1))

0.119906

0.276246

0.076067

0.140113

(0.47642)

(0.09498)

(0.07604)

(0.17861)

[0.25168]

[2.90846]

[1.00037]

[0.78447]

D(REER36T_SA(−2))

1.122531

0.311895

0.140931

0.124642

(0.49655)

(0.09899)

(0.07925)

(0.18616)

[2.26064]

[3.15066]

[1.77827]

[0.66955]

D(YW15$(−1))

−0.178547

0.236551

0.231120

0.309940

(1.08289)

(0.21589)

(0.17283)

(0.40597)

[−0.16488]

[1.09573]

[1.33725]

[0.76345]

D(YW15$(−2))

−0.947972

0.061820

−0.502630

−0.689499

(1.21899)

(0.24302)

(0.19456)

(0.45700)

[−0.77767]

[0.25438]

[−2.58347]

[−1.50875]

D(GDPFC11_12_SA(−1))

−0.748591

−0.202658

−0.273900

−0.540929

(0.42269)

(0.08427)

(0.06746)

(0.15847)

[−1.77103]

[−2.40494]

[−4.06004]

[−3.41356]

D(GDPFC11_12_SA(−2))

0.529571

−0.084278

0.222733

0.067975

(0.49134)

(0.09795)

(0.07842)

(0.18420)

[1.07781]

[−0.86038]

[2.84028]

[0.36902]

C

0.014856

0.003535

0.006740

0.023845

(0.01100)

(0.00219)

(0.00176)

(0.00412)

[1.35031]

[1.61166]

[3.83851]

[5.78122]

R-squared

0.151084

0.284082

0.317447

0.192553

Adj. R-squared

0.067125

0.213276

0.249942

0.112695

Sum sq. resids

0.613582

0.024387

0.015630

0.086239

S.E. equation

0.082114

0.016370

0.013106

0.030784

F-statistic

1.799496

4.012162

4.702562

2.411205

Log likelihood

114.4171

277.2934

299.7583

213.5080

Akaike AIC

−2.067665

−5.292939

−5.737788

−4.029861

Schwarz SC

−1.808742

−5.034016

−5.478865

−3.770938

Mean dependent

0.009867

0.001891

0.005073

0.015403

S.D. dependent

0.085017

0.018456

0.015133

0.032681

Determinant resid covariance (dof adj.)

6.58E−14

Determinant resid covariance

4.34E−14

Log likelihood

980.5819

Akaike information criterion

−18.54618

Schwarz criterion

−17.40692

Number of coefficients

44

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Trivedi, P. (2023). The Performance of India’s Merchandise Exports: An Analytical Perspective. In: Srivastava, D.K., Shanmugam, K.R. (eds) India’s Contemporary Macroeconomic Themes. India Studies in Business and Economics. Springer, Singapore. https://doi.org/10.1007/978-981-99-5728-6_25

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