The Institute organised a Webinar on “Exports and Growth in Indian Manufacturing: An Econometric Analysis with a Focus on the Recent Experience” on June 24, 2022. The discussion was based on recent research by Prof B N Goldar, former faculty at the Institute for Economic Growth (IEG), Delhi. The presentation was followed by a rich discussion by eminent panellists, Prof Amita Batra, Centre for South Asian Studies, JNU; Prof. Manmohan Agarwal, formerly Dean, School of International Studies, JNU and Visiting Fellow at ISID; and, Prof C Veeramani, Indira Gandhi Institute of Development Research (IGIDR), Mumbai and eminent participants. Prof Nagesh Kumar moderated the discussion. Prof Goldar’s research econometrically investigated the relationship between growth in exports and growth in the manufacturing sector real gross value added (GVA) in India using time-series data for 1987-88 to 2019–20 for the aggregate manufacturing sector and then at the level of disaggregated three-digit industries using data for 69 industries for 2014–15 to 2019–20. The analysis presented in the paper reveals a significant positive relationship between the growth in exports and the growth in real GVA of manufacturing. From the results of the empirical analysis, it appears that for the low-growth and medium-growth industries, increases in exports make an important contribution to their growth, but for the high growth industries, there are probably other forceful drivers of growth and exports play a relatively less important role. Another finding is that a greater prevalence of R&D activities and foreign equity participation among medium and large industrial enterprises in India adds to the pace of industrial growth. Also, – results of the analysis indicate that the adoption of ISO 14000 series certification and the associated implementation of comprehensive environmental management systems (EMSs) in medium and large industrial enterprises in India helps augment the pace of industrial growth.
In the ensuing discussion, the author received several useful and insightful comments and suggestions on the research study. Stating that the analysis brings forth the important issue of the need for export growth in the growth of industries that India is grappling with, the need to analyse employment growth, in addition to industrial growth is also crucial for India. The importance of including changes in Indian trade policies as well as global trade dynamics which have evolved overtime as a part of the long-term period of this study was discussed. It was also stated that emphasis on the role of international prices owing to distortions like tariffs, exchange rates, etc., which affect the domestic value added need to be laid on such kind of analysis. It was also suggested that policies which are important for accelerating industrial growth such as investment growth, trade protectionism, growth of imports of capital and intermediate goods would help to explain the industrial growth model better.