Export Led Growth of India

Decent Essays
Economic Growth of India
Economic Growth is one of the foremost goals of policymakers throughout the world. Every country has varied strategies across the time for pursuing this objective. One amongst all the strategy is the export-led growth. This strategies directly associated with East Asian countries during the recent period. Export-led growth model appears to have become a desirable for many developing countries across the globe in recent years. Following the Asian financial crisis of 1997–1998 and the global recession in 2001, the developing countries generated considerable interest in the potential of export-led growth a relative rapid growth along with surplus in the current. In this report we have done a study on the strategy-
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Benefits of export to the GDP growth of a country : • • Provides opportunities to achieve economies of scales and economic growth. Export-led growth can create profit, allowing a country to balance their finances and surpass their debts. • • Increased export growth can trigger greater productivity. Finances its imports.

Less Economic diversification : Export-led growth economies, by encouraging specific industries, simultaneously discourage other industries, resulting in less economic diversification. This exposes the economy to risk if global demand shifts away from the goods the country exports. This becomes especially important in agriculture-based economies that move from a self-sustaining economy to one focused on exports. For example, if a country 's farmers stopped growing food for subsistence and started growing tobacco for export, this country would not only suffer economically if global demand for tobacco dropped, it may no longer be able to feed itself. Because the government actively encourages specific industries by offering subsidies and other monetary incentives, it runs a risk of encouraging the wrong industries. Comparative advantage is difficult to ascertain in practice because determining the relative efficiency of an entire industry requires a large amount of data that can be beyond the scope of a
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