India's Foreign Trade and Real Exchange Rate Behaviour, 1980-1998

9 Pages Posted: 21 Oct 2007

Date Written: 2001


The study observes that in the 1980s, India's balance of trade deficit showed a tendency to decline in the face of a more rapid growth of exports than imports. The seven year period under NEP(1991-98), however, did not accelerate the process. Rather there is some indication of its failure on the balance of trade front. Contrary to the claim made in certain pro-NEP circles, exports did not pick up, while imports accelerated. Due to its failure to control domestic inflation vis-a-vis India's trading partners, the real (effective) exchange rate of the rupee appreciated in spite of substantial depreciation of nominal (effective) exchange rate.

Keywords: India, liberalisation, growth, real exchange rate, export performance

JEL Classification: F43, O11, N15, O53

Suggested Citation

Sarkar, Prabirjit, India's Foreign Trade and Real Exchange Rate Behaviour, 1980-1998 (2001). Available at SSRN: or

Prabirjit Sarkar (Contact Author)

University of Cambridge ( email )

Centre for Business Research
Cambridge, CB2 1AG
United Kingdom

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