ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Export Performance and India’s Tryst with Self-reliance in the Globalised World

India has embarked on the path of self-reliance with no clear road map. This paper highlights the need to demystify the concept and argues that any path to self-reliance would require creating new productive capabilities that would be determined not by what the country can produce but what it can export. Following the “product-space” perspective, promoted by Ricardo Hausmann and others at the Growth Lab of Harvard University stating that a country’s capacity to add new capabilities depends strongly on the existing ones, I assess India’s export performance since 1988 along three dimensions: growth, diversification, and upgrading, with the objective to understand how well India is prepared to achieve the goal in this globalised world and recommend developing a well-informed export strategy.


This study is part of a project funded by the Danida Fellowship Centre and instituted at the Copenhagen Business School. The author duly acknowledges Ankita Garg for the research assistance provided.

In todays world, the development policy landscape is entangled in a web of buzzwords (Cornwall 2010). One such buzzword that has come to dominate the development policy landscape in India is self-reliance. It has seen a meteoric rise after the Prime Minister called for a self-reliant India in May 2020 against the backdrop of the COVID-19 pandemic. The concept of self-reliance is not new to India. It was first introduced in the five-year plans when the Third Five Year Plan (196166) dedicated itself to self-reliant growth as a development objective in the face of worsening foreign exchange reserves and heavy reliance on external assistance. The objective was to progressively reduce and finally eliminate the reliance on external aid (Government of India 1961). Even though there was an active export policy, the focus was on import substitution, which was supported by a highly regulated and protected policy regime. Self-reliance remained a key objective in Indias development planning until the Ninth Five Year Plan (Government of India 1997). However, the concept was reinvented in the policy narrative whenever the macroeconomic context changed (Reddy 2000). For instance, in the 1980s, when the policy focus turned on structural change and efficiency, the term self-reliance was replaced by technological and economic self-reliance in the plan documents (Government of India 1980, 1985). Similarly, in 1991, when India transitioned from an import-substituting to an export-oriented regime with a series of far-reaching reforms, a self-reliant economy came to be defined as one which could meet all its import requirements through exports, replacing import substitution by promotion of exports as the critical instrument of self-reliance (Government of India 1992). The Ninth Plan (Government of India 1997) highlighted the need to attract foreign investment, which would provide access to technology for modernising industry and resources to avoid a build-up of external debt to help achieve self-reliance. Thus, the meaning of self-reliance evolved depending on the macroeconomic context.

The concept fell into disuse after being in use for four decades with different interpretations. Recently, it is brought back into the development discourse. However, in its reincarnation, its actual meaning is elusive and contested. It is floating free of concrete objectives, indicators, and targets; and shelter competing agendas of globalisation and import substitution. It is, as Cornwall (2010: ix) contends, full of sound and fury but signifies nothing. The concept needs to be demystified to assign a compelling sense of vision, aspiration, and commitment. I argue that in the current context of integrated global markets, the path of self-reliance would require the creation of new productive capabilities, which would be determined not by what the country can produce but what it can export. In other words, self-reliant India needs to be internationally competitive across diverse economic sectors (Singh 2020; Kant 2020). However, the literature suggests that a countrys capacity to add new capabilities depends strongly on the existing ones. In a series of articles, Hausmann and others at the Growth Lab of Harvard University (Hausmann et al 2007; Hidalgo et al 2007) argue that the countries with competitive strengths in the exports of sophisticated and complex products face better growth prospects than those with a low presence in these categories.

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Published On : 20th Jan, 2024

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