The crossing of the $400 billion mark is being seen as a sign of exports bouncing back strongly. But how significant is this landmark?
Logically the $400-billion mark would have been crossed at some point of time, just like the much-spoken-about $5 trillion economy where the GDP in nominal terms will cross the ₹375 lakh crore number in the next 4-5 years. Therefore, achieving this target is not such a landmark; in the past exports growth had turned negative after touching a high, before ascending again. Export growth turned negative in five of the last 10 years, reflecting a high degree of volatility.
This is quite unlike GDP growth which progressively increases and rarely falls into negative zone (the pandemic year being an exception). The reason for this difference is that exports tend to be mainly demand driven and hence any slump in the global economy gets hits their growth.
Exports over the years
The exports growth story is interesting as trends vary over various…