Exports A Fourth Of GDP, But Growth Still Domestic-Driven, Say Experts.

Impressive growth in exports in the first three months of the current financial year has suddenly increased the share of exports in the gross domestic product (GDP) in the first quarter by more than 3 percentage points compared with the corresponding period in the last fiscal.

Exports, as a percentage of GDP, stood at 24 per cent in Q1, 2011-12 as against 20.8 per cent in 2010-11 and still lower 19.6 per cent in 2009-10. For some India analysts, this does not bode well for the Indian economy, if the world is headed for a recession. After contributing to the GDP in a stellar fashion in the first four months (July exports were almost 82 per cent higher compared with July 2010), a global recession would diminish the prospects of exports from India and hence, economic growth.

Many in India are not convinced that the momentum in outbound shipment, though dramatic, will sustain itself in the coming months. And, more importantly, they say even if exports decline in the third quarter, it will not impact GDP substantially. In fact, they maintain that as the fiscal ends, export-to-GDP will be “more or less similar to what it was last year”.

Source : indianexpress.com