Indian Exports- Numbers vs Noise of Make in India


Make in India


In the last few years since 2014, there is a story to tell from India. And that is a tragedy. That story is the story of Indian Exports.

Also, in the last few years, we have been hearing, seeing and made to see ‘Make in India’ campaign by the Government.

As per the official website, the primary goal is “encouraging multinational and domestic companies to manufacture their products in India” and “Come make in India. Sell anywhere, [but] make in India.”

It is more than three years and its only fair to do an analysis of where the country stands.  There are some primary questions that must be asked. Any nation that has become an economic behemoth had done so on the back of strong export economy. There is simply not another example anywhere.

With a thrust to manufacturing, it is important that we assess actual export performance against the intent and claims.

Data Sources:

  1. Handbook of Indian Economy by RBI
  2. Directorate General of Commercial Intelligence and Statistics. (manual retrieval of commodity wise data.)


Numbers don’t lie. Non-Oil export growth of India has consistently fallen down. The below picture explains how it has fallen in the past three years. 2016-2017 growth of 8.26% is lesser than 8.80% growth achieved during so called ‘policy paralysis’ year.

Non-Oil Export Growth

Further, if we look at below graph, the yellow bar shows the non-oil export from India. It is amply clear that in the last three years, there have been stagnant and decline in export. Also, the fall in growth rate is less than 2009-2010 period which was the immediate aftermath of global financial collapse.

India Export – abs and growth

Two external factors may be provided as reasons:

  1. Global growth – In both instances, the global growth is comparable and that has not cast any shadow on our performance. So this doesn’t negatively affect our export growth now.
  2. Base effect – Another wrong analysis which people tend to believe is that our export base is very high that we cannot match the growth. This is wrong because, per monthly export in India averages around USD 24Bn, the same is around USD199Bn for China. What it means is that we have ample scope to grow but not growing.


One year maybe a blip. This can occur due to multiple reasons. However, if we consider all three years combined or all four years combined, these have been worst performing years.

Take a look at the graph below which shows three years CAGR and four years CAGR.

CAGR – 3 yrs 4 years

Our Non-Oil exports have grown only at 2.57% CAGR since 2013-2014. The four-year CAGR shows a slight increase to 5.94%, which means, that the UPA year has more growth and hence influencing higher growth.

Not just this, if we consider export since 1992, the year since we started opening up, the growth has actually been pulled down only by last three years of disastrous performance. Don’t be misled by one to two percentage points drop. This is cumulative and the principle of compounding applies.

Cumulative growth since 1992

Inference 3: EXPORT SLUMP CONTINUES TO 2017-2018

Data from government is available only upto July 2017. Going by the four-month data and comparing with past three years, FY2018 doesn’t seem different. Non-petroleum export has grown only at 2.86% whereas top 20 commodities excluding petroleum has grown at 4.48%. Both these numbers are lesser than corresponding period of FY17.

Apr_Jul Growth Comparison

We have no idea how the remaining 8 months will pan out. The global growth remains the same like last year with no threat to it. As recently as last week, the Federal Reserve has reiterated that its confident about the growth rate.


Textile and Leather industries are labour intensive and have employment in formal and informal sectors. These two sectors are contracting in the first four-month data that is available.

Textile Growth
Leather & Allied Growth


Textile provides large amount of employment to women and semi-skilled workforce. If the textile has indeed not growing unto the mark, it is a sign that the textile manufacturing has gone past India. The answer to India’s job crises must start from textile, leather and construction.

It has to be reiterated that no major economy has grown without export and cannot grow as well. Given this context, where we are neither an oil rich Gulf state nor a mineral rich Australia, processed goods should form backbone of our economy. Unfortunately, what we are witnessing is a scheme after scheme on paper but an abject failure in the real results.

“Talk less and work more” would be a good advice to the government, despite of we knowing that it will fall in deaf ears.

A year ago, I wrote about the Technology sector. It can be accessed here. It was amply clear that the world had more factories than it needs. It still remains true. The government must be cognisant of this fact and act as per the realities of the world than the ethereal echo chambers of its corridors.


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