The Employment Dividend From Exports

Context: The surge in some export sectors has the potential to address India’s urban jobs challenge with necessary policy intervention.

Recent booming trend in Indian exports

• In the first five months of 2021-22, exports at $164 billion were 67 % higher than the same period of 2020-21.
• Exports of $164 billion in April-August 2021 were 23 % more than those in the same months of 2019.

Analysing the elemental growth in Indian exports: Factors which benefitted Indian exports

• Petroleum price surge: Prices of petroleum products, which account for over 14 % of India’s merchandise exports, have gone up by about 50 % in the last year.
• Broad-based recovery in non-petroleum, oil and lubricants (POL): The increase for non-POL exports was almost at the same level of 22 %.
• Growing footprint of China in India’s exports: Even as imports from China have come under scrutiny, India’s exports to China have been rising at a healthy pace.
  • Exports jumped by 26 % in 2020-21, even as India’s overall exports fell by 7 %.
  • In April-June 2021, they were estimated at $6.75 billion, up from $5.5 billion in the same months of 2020.
  • In a post-pandemic world, China has pushed out the United Arab Emirates to become India’s second-biggest export destination, after the United States.
  • This will play an important role in India’s strategic policy making about its neighbours.
• Tepid automobile exports: In 2019-20, vehicle and car exports were estimated at $7.8 billion before dropping to $5.1 billion in 2020-21.
• Recovering employment-intensive sectors: Some have made smart recoveries: For instance, 
  • Pearls and precious stones have made a comeback. At $27 billion, they were the second biggest item in India’s exports basket, accounting for about 9 % of total exports in 2013-14. 
  • In the gold jewellery segment: In the April-June 2021 period, exports of gold jewellery have recovered, though it is yet to recover its pre-pandemic share of 4 % in India’s total merchandise exports.
  • Exports of readymade cotton garments, fabric: they have already acquired a share of 3.7 % in total exports, and it appears that if the trend continues, they could increase their share