New Delhi, May 22
An opportunity to grow exports is knocking on India’s door as supply chains are getting redrawn and steps which raise mid-tech labour-intensive exports can boost the country’s trade interlinkages, mass consumption, investment, and GDP growth, according to an HSBC report released on Thursday.
While there is a general sense that India is mostly a domestic demand-driven economy, it is in periods of rising integration with the world that India has grown its fastest, the report states.
The report uses the rolling correlation between India and world GDP growth as a measure of global integration, and finds that the 2000-2010 decade was a period of falling import tariffs, as well as rising global integration, export share, and GDP growth. In the next decade, 2010-2020, all of this changed.
"Tariffs were raised, and global integration, export share, and GDP growth fell. Encouragingly, the few years following the pandemic reflect a rise in global integration once again, though so far it remains a tad one-sided - more financial integration, less trade integration," the report states.