| Pub. Date | : Jan, 2024 |
|---|---|
| Product Name | : The IUP Journal of Applied Economics |
| Product Type | : Article |
| Product Code | : IJAE020124 |
| Author Name | : Sampriti Das |
| Availability | : YES |
| Subject/Domain | : Economics |
| Download Format | : PDF Format |
| No. of Pages | : 39 |
At the root of the second wake of export pessimism is the argument that export-led growth (ELG) models suffer from a fallacy of composition. Under constrained global demand, all exporting nations cannot simultaneously pursue ELGs, and the ensuing battle for markets would eventually cause more competitive exporters to drive out or displace less competitive ones. Considering how the Indian economy has witnessed a deceleration in her export of services since the mid-2000s, this paper enquires whether similar export-displacements could have lent to this status quo. Using bilateral service trade data for the years 2005-2015, the paper tests the displacement or crowding out of India's export of services to advanced OECD nations by exports from other developing and emerging market economies. Our results show the remarkable presence of complementarity between service exports from India and that from other exporting powerhouses like China, Singapore and Vietnam, though the country appears to have been losing markets for her prime services to certain emerging exporters.
The fact that the advantage which our own country gains from a favorable balance (of trade) is liable to involve an equal disadvantage to some other country means not only that great moderation is necessary, so that a country secures for itself no larger a share of the stock of the precious metals than is fair and reasonable, but also that an immoderate policy may lead to a senseless international competition for a favorable balance which injures all alike.
- Keynes J M (1936)
Much has been said about the performance of India's service exports in isolation; much less on how she compares to the rest of the world. A nation's ability to sustain higher rates of export growth is not independent of the ability of its peers to do so. While it is established that the country is the eighth largest exporters of commercial services, in terms of size, the trickier question is whether she is consistently performing better than her competitors?