IAETSD JOURNAL FOR ADVANCED RESEARCH IN APPLIED SCIENCES ISSN NO: 2394-8442

STRUCTURAL CHANGE IN COMPOSITION OF INDIA’S

EXPORT: ERA
Sameer Kumar #1, Dr. Subarana Sarkar Mukarjee#2
1Research Scholar, Department of Commerce, CSJM University, Kanpur, Uttar Pradesh, India
2H.N.B. Government P.G. College Naini Allahabad, CSJM University Kanpur, Uttar Pradesh, India

Abstract— The composition of India outside exchange has experienced significant changes, especially after the
progression and globalization. Our principle trades now incorporates substantial building merchandise, oil based
commodity synthetic and allied product, Gems and Jewelleries, Material, Electronic products significantly more.

This statistical study is representing on the structural change in the mean of commodities exported from India during last
more than two decades since 1991- 2014. The annual compound growth of mean ratio of commodities is positive and
statistically significant. But India has insignificant share in the world trade so India is necessary to make its commodities
more competitive at the world level. There is also necessary to add new commodities and services at competitive price and
integrated efforts.

Keywords— Structural Change, Policy Guidance, Composition

I. INTRODUCTION
This process of globalization has got momentum through the process of economic integration, and in the growth of the
volume of international trade [2, 14]. India has been a relatively new comer to the process of expansion of international
trade since its opening up to world trade only began after the crisis in 1991. The opening up to international trade should
be seen as a crucial aspect of the new approach to the economic policy and as integral part of the process of reforms. In
1991 the government introduces some changes in its policy on trade, foreign investment, tariffs and taxes under the name
of “New economic reforms”. The economic process introduce since 1991 with centralize integration of the Indian
economy with rest of the world [16].

The growth rate of India’s trade is increasingly dependent on exogenous factors such as world trade growth,
international price changes and development in the competitor countries. Cross currency exchange rate as well as dollar
rupee exchange rate movement also gets reflected in the performance of India’s trade [1, 10]. Indian economy and remote
exchange has demonstrated process post advancement. In impediment to the pre-change period 1950-90, the real
development of fare in the post-change period has been over the potential offered by the development of world request.
The hole between the real and potential is for the most part clarified by a change in the general aggressiveness of India's
fare [8].

The creation of India's outside exchange has experienced generous changes especially, after the liberalization and
globalization [9]. Our fundamental fare now incorporate assembling merchandise, for example, building merchandise, Oil
based commodity, chemicals and unified items Diamonds and jewelleries Materials, Electronic products substantially more,
which constitute more than 80% of our fare wicker bin. Various scientists featured that basic change is imperative factors
in India's fare strategy. Table 1 indicated diverse commitment as far as Indian fares economy.

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Table1. Different Contributions by a No. of researchers

Sr. No. Expert Year Contributions

1 Bodenhorn, H [5] 1990 Review of economics and statistics

2 Kalirajan, K. [6] 2003 Impact of decade of India’s trade reform in DFAT report

3 Malik J. K. [7] 2005 India’s export policy defeating exchange rate arithmetic

4 Pillania R. K. [9] 2008 An exploratory study of Indian foreign trade

5 Bhanumurthy K. B. [2] 2011 Dominance and concentration of FBI across country analysis

6 Bhat T. P. [4] 2011 Structural changes in India’s foreign trade

7 Sally R. [10] 2011 Indian trade policy after the crisis

8 Sinha Manoj [12] 2013 Pattern of foreign direct investment flow and economic
development
9 Shani P. [11] 2014 Trends in India’s exports a comparative study of pre and post
reform
10 K. B. and Sinha M. K. 2014 Dominance and competition of global outword foreign direct
[12] investment
11 Mathor and Sagar [8] 2015 India’s international trade since globalization
12 M. K. Sinha [17] 2016 Structural change in composition of India’s export during post
economic reform period

II.STRUCTUAL CHANGE
A process of development requires structural change. The structural difference in an economy happens for the most
part along two measurements: one is the changing sectored share in GDP and the second is the changing offer of the work
drive occupied with every segment [6]. If there should arise an occurrence of created nations, it is seen that as an initial
step the farming segment loses its significance with a synchronous development of the assembling part or tertiary area [3,
4]. A large portion of the created nations and 92 a portion of the recently industrialized nations have crossed this limit and
are presently encountering a move from assembling part to the administrations segment. For financial specialists like Lewis,
monetary development requires auxiliary change in the economy, for instance, a development of laborers from low esteem
added agribusiness area to higher esteem included assembling and administration segments. For economists like Lewis,
economic growth requires structural change in the economy, for example, a movement of workers from low value added
agriculture sector to higher value added manufacturing and service sectors. Figure 1 show the relations-ship and effect
related scenario between different objects.

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Fig1. Effected objects of Structural Change

Present day monetary advancement can't be clarified attractively as far as work and capital alone. An extensive number
of hypotheses of monetary improvement have been propounded in the current past. Distinctive elements have been
distinguished as determinants of development in various development models. The advanced market analysts underline the
reactant part that innovative changes play in the development of an economy [5, 13]. The mechanical changes realize an
expansion in per capita pay, either by diminishing the measure of data sources per unit of yield or by yielding more yield
for a given measure of info. Mechanical difference in an economy, in this way, alludes to changes in the info yield relations
of creation exercises.

Thus, as an economy moves from lower to higher phases of advancement, there happens a move from more
straightforward to more present day and confused strategies of creation, from one viewpoint, and from essential to
auxiliary and additionally to tertiary areas, on the other [8,11]. Different measurements in which their structure can be
analyzed incorporate divisions and item gatherings, space, rural, urban and interregional conveyance crosswise over size of
generation units, salary gatherings and utilization use classes of families, mechanical and efficiency varieties crosswise over
parts and exercises, different sizes and areas, and acquiring contrasts crosswise over exercises, aptitudes, sex and social
groups[15]. As it were, an examination of basic changes going with financial development brings out different appearances
of the arrangement and circulation of development.

III. STRUCTURE CHANGE ANALYSIS MODEL (SCAM)

We Have Developed A Structure Change Analysis Model That Demonstrates The Analysis And Effect Of Policy. The
Proposed Model Is Shown In Figure 1. The Model Establishes An Appropriate Impact Relationship Between Two Mean
Values Of Commodity At Different Years. The Values Of These Products Can Be Effortlessly Identified With The Help
Of Secondary Values. The Quantifiable Evaluation Of Structure Change Is Very Supportive To Get Exact Index Of Mean
Values.

FIG. 1. ASSOCIATION BETWEEN POLICY CHANGE AND STRUCTURE CHANGE

As found in table 2 the offer of oil based goods in India's fare wicker container has been expanding since 2000-01.
Strangely, the offer of readymade pieces of clothing, which has been dominating part in trade wicker container, has been
declining ceaselessly and it came to 4.78% of every 2013-14. Building products, speaking to an exceptionally general class,
keeps on being a division with most astounding offer in India's fare crate. Share of chemical and chemical product has
remained same additional time while offer of gems and jewellery has declined from 16.11% of every 1990-91 to around
13.14% out of 2013-14. Offer of leather has declined from 8% of every 1990-1991 to 1.82% out of 2013-14. Offer of tea
and marine items have been consistently declining, while offer of electronic products has been expanded to 2.44% of every
2013-14. This examination work relies upon mean esteem and perception on mean utilizing statically investigation. The
information reach from [3] and ascertain the mean of ware in various year, additionally apply the measurable investigation
on mean esteem.

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Table 2: Change in Composition of India’s Export Basket

2010-11
1990-91

2000-01
1995-96

2005-06

2013-14
Commodity/Year

Mean

Mean
Petroleum Products 2.88 1.43 4.20 2.84 11.29 16.52 20.05 16.10
Gems and Jewellery 16.11 16.59 16.57 16.42 15.06 16.12 13.14 14.86
Basic Chemicals, Pharmaceuticals
& 7.28 8.45
Cosmetics 6.81 6.82 8.22 8.85 7.69 8.81
Transport Equipnment 2.21 2.91 2.23 2.45 4.19 6.39 6.86 5.81
Machinery and Instruments 3.84 2.61 3.55 3.33 4.93 4.71 5.19 4.94
Readymade Garments 12.32 11.56 12.50 12.13 8.36 4.62 4.78 5.92
Manufacture of Metals 2.51 2.60 3.54 2.88 4.11 3.37 3.10 3.53
Electronic Goods 1.28 2.11 2.36 1.92 2.11 3.27 2.44 2.60
Other Engineering Goods 1.67 1.39 1.32 1.46 2.29 3.38 2.24 2.64
Leather and Manufactures 7.98 5.51 4.36 5.95 2.62 1.56 1.82 2
Rice 1.42 4.30 1.44 2.38 1.36 1.01 2.47 1.61

Other Agriculture and Allied 0.74 1.67 1.80 1.40 1.58 1.59 2.16 1.78
Products
Marine Products 2.95 3.18 3.13 3.08 1.54 1.04 1.62 1.4

Other Ores and Minerals 2.01 2.05 1.76 1.94 2.27 1.55 1.27 1.7

Oil Meals 1.87 2.21 1.00 1.7 1.07 0.97 0.90 .98

Iron Ore 3.22 1.62 0.80 1.88 3.69 1.87 0.51 2.02

Carpets 2.06 1.77 1.31 1.71 0.83 0.41 0.33 .52

Tea 3.29 1.10 0.88 1.76 0.38 0.29 0.26 .31

Cotton Yarn, Fabrics, Madeups, 6.45 8.10 7.77 7.44 3.83 2.30 2.85 3.
etc.
Manmade Yarn, Fabrics, 1.25 2.36 2.38 2.38 1.90 1.70 1.64 1.75
Madeups,etc.
Iron and steel .89 2.19 2.31 1.79 3.44 2.04 2.40 2.63

Plastic and linoleum Product .61 1.84 2.05 1.5 2.73 1.86 2.16 2.25

Rubber, Glass, Paints, Enamels 1.71 2.05 2.10 1.95 2.04 1.43 1.73 1.73
Products
100 100 100 100 100 100 100 100

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IV. EMPIRICAL VALIDATION

Empirical Validation is a basic piece of proposed look into. Empirical Validation is the standard way to deal with give
justifiable reason explanation behind the model endorsement. Taking perspective of this reality, functional approval for the
structure change show with mean esteem has been performed utilizing test tryouts. So as to approve created structure
change demonstrate with mean esteem utilizing spss devices and information has been taken from [17 ]. For whatever
length of time that measurable effect and significance of every autonomous variable in the Auxiliary change show is fear. It
can be seen from the last section of Table 3, (p esteem for't' test) that the majority of the taking an interest in the model is
measurably impressive at a criticalness level of 0.05 (equivalent to a certainty level of 95%).

Table 3. Coefficient
Model Unstandardized Coefficients Standardized t Sig.
Coefficients
B Std. Error Beta

Mean 0.599 1.908 0.070

2observation 1.701 .892
3.429 0.003
0.547 0.160

Pearson’s coefficient of correlation technique was used for estimating the degree of correlation among variables. The
value of correlation ‘r’ lies between ±1, positive value of ‘r’ in Table 4 is a sign of positive correlation between the two
variables.

Table 4. Pearson Correlation

Mean1observation Mean2observation
Pearson Correlation Mean1observation
1.000 .599
Mean2observation
.599 1.000

Moreover the evaluation of R2 (Coefficient of Determination) and adjusted R2 in the Table 5, is to very encouraged. It
refers to the percentage of the whole variance in functionality by all contributing values in the model.

Table 5. Model Summary

Model R R Square Adjusted R Square Std. Error of the Estimate

1 .599a .359 .328 3.09909

V. COMPOSITION OF SERVICES EXPORTS

Piece of India's administrations trades involve travel, transportation, protection, GNIE, and various administrations
having yearly compound development rate 11.22%, 13.69%, 14.85%, 14.29%, and 21.51% individually amid 1990-91:2014-
15. General development rate of aggregate administration is 17.41%. The real drivers of maintained year-on-year
development rates enrolled by total Indian exportable administrations have been income from Travel, Transportation and
Various Administrations which represents both Software and Non-Software administrations. The paper utilized the mean
estimation of administration divisions are appeared in table 6, 7, and 8.

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Non-software services, under various receipts, recorded a fall in year-on-year development rate. Communication,
business and financial services were the significant supporters of the decrease in non-software services. Business,
Communication and financial services recorded negative growth rates in 2014-15.

Under random services contains software, business, financial related and communication having yearly compound
development rate 13.31%, 14.67%, 19.87%, and 1.32% separately amid 2004-05:2014-15. General yearly compound
development rate of various administrations is 12.31%. Notwithstanding, business, budgetary and correspondence
administrations enrolled negative Y of Y development rate in 2014-15. This research work examined by researcher in a
systematic way and also calculates the arithmetic mean of composition in table 6, 7 and 8.

Table 6. COMPOSTION OF INDIA’S EXPORT OF SERVICES

t /year

2000-01
1992-93

1993-94

1994-95

1995-96

1996-97

1997-98

1998-99

1999-00

2001-02
1990-91

1991-92
produc

ACGR

Mean
Travel 11.22% 145 1977 2098 2222 2365 2712 2878 2914 2993 3036 3497 313 2607
6 7
Transportation 983 93.9 982 1433 1696 2011 1953 1836 1925 1707 2046 216 1639.33
13.69% 1
Insurance 14.85% 111 108 158 124 152 179 217 240 224 231 270 288 191.83

G.N.I.E. 15 17 75 30 10 13 72 276 597 582 651 518 238

14.29%
Miscellaneous 198 198.1 1417 1455 1912 2430 2354 4163 7447 10153 9804 110 4680
21.51% 6 5 36

Table 7. Compostion Of India’s Export Of Services

product

2002-03

2003-04

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2012-13

2013-14
2010-11

2011-12

Mean
/year

3312 5037 66666 7853 9123 11349 10894 11859 15793 18462 17999 17922 11355.75
Travel
Transportati

2536 3207 4683 6325 7974 10014 11310 11178 14246 18241 17334 17380 10369
on

369 419 870 1062 1195 1639 1422 1591 1945 263 222 2121 1280.92
Insurance

2 7

293 240 401 31 25 33 38 441 53 478 574 488 394.67

Miscell G.N.I.

4 3 0 9 5
aneous E.

1425 17965 30629 42105 55235 67010 81947 70977 92117 102513 107544 113564 66321.58
3

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Product Table 8. Compostion Of India’s Export Of Services

2004-05

2005-06

2006-07

2007-08

2008-09

2009-10

2012-13

2013-14

2014-15
2010-11

2011-12
CAGR

Mean
/year

Software 17 23600 31300 40 46300 49705 53100 6221 65867 69439 7310 48425.5
services 70 30 2 8
13.31% 0 0
Business 51 9307 14544 16 18602 11321 24050 2591 28447 28482 2842 19183.9
services 67 77 0 1.86 6
14.67% 2
Financial 51 1209 3106 32 4428 3693 6508 596 4949 6650 5661 4172.7
services 2 17 7
19.87%
Communication 13 1575 2262 24 2298 1228 1562 1600 1686 2410 1997 1855.45
Services 1.32% 84 08
Total Misc. 30 42105 55235 67 81947 70977 92117 1025 107544 113564 1148 79866.8
Services 62 01 13 94
12.31% 9 0

It is essential to test the validity of proposed model for acceptance. 2 sample t tests apply for check the impact between
standard integrity and calculated integrity. 2t-test is handy hypothesis tests in statistics when compare means.

Table 9. 2 t- test between Mean1observation and Mean2observation

Paired Samples Statistics

Mean N Std. Deviation Std. Error Mean
Mean1observation 3.8074 23 3.78157 .78851
Pair 1 Mean2observation
3.8491 23 3.14026 .86330

Null hypothesis (H0): There is no significant difference between Mean1observation and Mean2observation
H0: μ1-μ2 = 0
Alternate hypothesis (HA): There is significant difference between Mean1observation and Mean2observation
HA: μ1-μ2 ≠ 0
In the above hypothesis μ1 and μ2 are treated as sample means of population. Mean value and Standard Deviation
value have been calculated for specified two samples and represented in table 6. Correlation comes out to be 0.599. The
hypothesis is tested with zero level of significance and 95% confidence level. The p value is 0.032. Therefore null
hypothesis directly discards and the alternate hypothesis is accepted. The developed equation used for confidentiality
estimation is accepted.

VI. CONCLUSION
Various growth-cum-development models have attempted to understand the respective roles of a wide range of economic,
service and social factors. The need to better explain the policy channels of progress has been the main focus of
endogenous growth models. These model have been extended in new directions, particularly to allow for policy change
and structural change, these sophisticated models have yielded very few specifics in terms of policy guidance. This is partly
due to the fact that much of the empirical research has been dominated by cross-country analysis. In conclusion, it needs
to be noted that this work is rather descriptive and statistically and does not aspire to nail down the determinants of
structural change. Once the direction of structural change is clear, it would be possible to look for the causes of such
improvement.

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