India’s growing exports: Not the full story

The Economist reports that as a percentage of GDP, India’s exports of goods and services have increased from 12% to nearly 25% over the past decade. However, this does not tell the full story. A quick look at the numbers shared by  India’s Department of Commerce shows that India’s trade deficit has grown in sync with the increasing exports.

Year                                  2006-2007   2007-2008   2008-2009   2009-2010   2010-2011

India’s Trade Balance   -59,321.19   -88,521.83   -118,400.95   -109,621.45   -118,633.24

in million USD

The Symbol of Indian Rupee approved by the Uni...

Image via Wikipedia

This may imply that India’s economy is getting more integrated with the world economy. Absolute as well as relative increases in exports are going in hand in with equal or greater increases in imports. The bottom line – consumption driven growth.

Read more at India’s economy: Not just rubies and polyester shirts | The Economist.

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