Reassessing Export-Led Growth Model

Export led growth is where a significant part of the expansion of real GDP, jobs and per capita incomes flows from the successful exporting of goods and services from one country to another. India has focused on domestic-demand led growth. But there is no known model of domestic demand/consumption-led growth, anywhere that has delivered quick, sustained, and high rates of economic growth for developing countries.

Geo-Economic Scenario:

· The changing international environment

· Structural Issues

Cheap Imports
Depopulation,
Declining productivity,
High debt.
Deglobalization.
Market-Reforms

Way forward:

To improve infrastructure
Need to build strong domestic demand.
Needs to invest in its education, research & innovation capabilities
Easy credit
Economic Decentralisation
Import substitution strategy.
Foster innovation
Develop skills
Reduce barriers to doing business.

The ability of India’s export growth to outpace that of the rest of the world— as indeed it has done spectacularly for three decades—will be increasingly constrained.

Both exports of manufacturing and services are skill-intensive and becoming more so, and if the quality and quantity of skills available to the economy starts slowing (rising Lewis curve), exports will run into domestic supply 21 constraints.