DefinePK

Abstract

The paper examines the impact of price and non-price factors relating to internal supply and external demand on India’s exports. The constant-market-share model has been adopted to examine the problem. The paper underlines that India’s exports of traditional commodities are noncompetitive whereas that of non-traditional commodities are competitive compared to the rest of the world. Overall, India’s exports are competitive vis-a-vis the rest of the world. The state of competitiveness of exports is determined by demand and supply factors. Factors relating to external demand play an adverse role in determining the competitiveness of India’s exports. Also, impact of factors such as labour and material costs on the supply side hamper competitiveness. Thus, favorable competitiveness appears to be mainly the outcome of India’s export promotion policies. It is suggested that the export incentives given to the performance oriented manufacturing sectors need to be continued to enhance their export performance.