Six States That Account For 75 Per Cent Of India’s Exports

Economic Survey 2018 says that for the first time ever there is an opportunity to know the state-wise distribution of international exports of goods and services.

Table 5 provides these data.

Six states — Maharashtra, Gujarat, Karnataka, Tamil Nadu, Telangana and Haryana — in that order account for 75 per cent of India’s exports, says the survey, citing the figure below.

The export data for individual states also reveal that the prosperity of states is related to their export performance.

Figure 4 shows that the conventional wisdom is correct: a state’s gross state domestic product (GSDP) per capita is linked with its export share in GSDP (for 20 major states). The one major outlier in the chart is Kerala, but only because it is a major recipient of remittances. If remittances are added and created a broader globalisation index for states, Kerala may not be an outlier.

Additionally, goods and services tax (GST) data suggests that India’s internal trade in goods and services (excludes non-GST goods and services) is about 60 per cent of the GDP. The five largest exporting states are Maharashtra, Gujarat, Haryana, Tamil Nadu and Karnataka. The five largest importing states are Maharashtra, Tamil Nadu, Uttar Pradesh, Karnataka and Gujarat. The states with the largest internal trade surpluses are Gujarat, Haryana, Maharashtra, Odisha and Tamil Nadu.

The data shows that the states that export the most are also the ones that import the most. Also, the states that trade the most are the ones that are the most competitive and run the largest trade surpluses.

Now there is enough evidence to state that internal trade in India is related to prosperity.

Figure 7 plots the share of trade (exports plus imports) in a states’ GSDP against its per capita GSDP.