Economic Growth and prosperity have always been measured by the values and volumes of international trade. Both exports and imports are critical to economic development and prosperity. Exports bring in the much-needed foreign exchange and earnings into an economy. Imports make a larger variety of goods available to the average consumer, giving them the freedom of choice. Imports also increase competition in the economy and, hence, boost productivity.
It is for this reason that trade has become an important indicator of the wealth of a nation. With this perspective, let us look at how India has performed. India’s share of the world trade was 2.5% at the time of her Independence. By the 1980s, this has plummeted to 0.45%. This performance was no better than pathetic! By 2008, India’s share had risen to 1%. With 16% of the world’s population, the country would need to increase its imports and exports 32 times to reach the world’s average.
Compare this with Singapore, the country has a population of 5.18 million (about one-third the population of Delhi alone), but its imports and exports are double that of India. This translates to each citizen of Singapore trading, on an average, 500 times more than an Indian.
You may argue that India and Singapore is not a fair competition. How about comparing India to China in that case? Both the countries have similar population and some of the issues, like poverty, are similar in both the economies.
In 2010, India’s exports were around $225 billion, while China recorded almost $1.6 trillion in exports. On the imports front, India’s figure stood at $358 billion, while China recorded a little over $1 trillion. India’s performance is almost embarrassing. What do you think India should do to boost her position?