Here’s a stunning export success story that very few have noticed. Indian manufacturers, data seems to indicate, now export more than half their output. As a share of total industrial output (this includes infrastructure sectors like coal and electricity) exports are still a massive 35% for fiscal ‘02-03.

India ’s overall exports to gross domestic product (GDP) ratio is rather low, especially in comparison with some of its East Asian counterparts. However, the overall figure hides the fact that it’s the low share of agricultural exports, as a percentage of total output in that sector, that depresses the overall exports-to-output ratio.

The commonly-quoted ratio, commodity exports (agriculture plus industry) to national income or output, measured in terms of gross domestic product, stands at a little over 11%, while the ratio of commodity exports plus services exports to GDP stands at under 17%.

In sharp contrast, the share of manufacturing exports was 52.9% in the total value of manufacturing output for ‘02-03. This share has been rising rapidly through the last decade.

For fiscal 1992-93, manufacturing exports, as a percentage of manufacturing GDP, stood at 35%. The 52% figure for ‘02-03 means a compounded annual growth rate (CAGR) of 16% in manufacturing exports, which is far higher than the 12% CAGR in manufacturing output at current prices over the period

Manufacturing contributes 15.5% of India ’s GDP and 59% of industrial GDP. It is due to this segment, that the overall industrial exports to industrial GDP ratio has risen to 35%, since over 95% of industrial exports are in the form of manufacturing exports.

On the other hand, the share of agricultural exports to agriculture’s GDP is at 6.1%, which has barely grown from 4.3% in 1992-93. The share of agriculture in overall GDP at current prices, at 22%, is not much higher than manufacturing GDP.

Services exports form less than 11% of services GDP, even while services GDP has risen at a CAGR of 15% over the period.

In some manufacturing industries, however, it is the different way in which GDP and exports are measured that yields such a high proportion of manufacturing exports as a percentage of manufacturing GDP.

“While exports in areas like gems and jewellery and petroleum products account for the value added to the commodity plus the raw material cost, the GDP accounts for only the value addition to a product,” says Mahesh Vyas, director and CEO, CMIE.