Exports: A Viable Business Proposition

The purpose of the paper is to ascertain whether the corporate sector has demonstrated the ability to generate net foreign exchange earnings from exports. While analysing export performance, the paper concludes that except for traditional exports, a large number of diversified exportables made by corporates, experience a net outflow off oreign exchange. At the disaggregated level, the ownership pattern shows that while the Indian corporate sector has achieved a significant reduction in net foreign exchange spending in the post-liberalisation period, the same cannot be said about the foreign and the government sectors. The reason why large corporates display a lackluster export performance is because exports are not perceived as a viable business option. This is so because the profitability of exports does not compare favourably with sales in the domestic market. Besides, exports continue to be burdened by cumbersome procedures and infrastructure bottlenecks which raise the transaction costs. Nevertheless, corporates need to devise strategies to give a thrust to exports in order to meet the challenge of competition.