Impact of Diversification of Composition of Exports:An Analysis of the Linkages of Indian Exports

Most of the developing countries have followed a path of diversification of the composition of exports in the post-war period. The purpose of this paper is to examine the impact of diversification of the composition of exports on the Indian economy for the period 1951-52 to 1983-84. To this end, the import, income and input effects of exports have been measured in an input-output framework. The results show that the import intensity of exports has doubled, the income intensity almost halved and the input intensity has not shown any marked increase, for the period considered. The reason for this can be traced to a shift in favour of non-traditional exports. Certain sectors of exports have been identified which would benefit the domestic economy the most.