Capital Goods Exports From India:An Analysis of Trend, Structure and Determinants

The study analyses the trend, structure and determinants of capital goods exports from India with the economy emerging as the major capital goods producing LDC. It is observed that capital goods exports grew till 1980 and relatively stagnated thereafter. The commodity composition changed significantly. Though newer markets emerged along with the existence of traditional ones, world demand patterns and movements in real effective exchange rate did not play a significant role in determining such exports. On the other hand, domestic demand pressure and in-house R&D are found to have significant impact. As a depreciating rupee and changes towards a more liberal policy did not have any perceptible influence on capital goods exports, it is concluded that a policy of product specific export promotion through the development of non-price factors might contribute to sustained export growth.