ABSTRACT

The critics of India's economic policy moves appear to equate an outward-looking economic strategy with indiscriminate export promotion based on an armoury of export subsidy schemes. The hallowed doctrine of comparative cost advantage of international trade theory is no more than an enunciation of the principle of self-reliance. The course and pattern of India's imports reflects the capital-intensive industrialization strategy she has pursued. Imports are mostly geared to the production of capital goods and equipment destined for the production of goods and services for the home market. The heavily domestic-market-oriented import and industrialization strategy has had predictable effects on India's export performance and export structure. The export promotion measures adopted since the sixties, though they may have sustained the rate of growth of exports, appear to have done little to promote an efficient pattern of resource allocation and foreign trade.