Journal Press India^®

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The economic liberalization in India resulted in a shift from a fixed exchange rate regime to flexible exchange rate regime. Further, as a consequence of liberalisation and globalization, there was a removal of tariffs and non-tariff barriers, which led to a growth in exports. As agriculture forms the backbone of the Indian economy, we analyse two aspects of agricultural commodity exports, namely, growth and instability, over the period 1990-91 to 2010-11.  In order to see the impact of policy periods, the study is categorised into four different policy periods, corresponding to liberalisation, WTO, world recovery and global crisis. This is followed by an attempt to see the impact of macro-economic variables such as exchange rate, GDP and money supply on the performance of agricultural commodity exports. The study concludes that growth of agricultural commodities exports largely depends upon GDP. Instability, on the other hand, depends upon money supply. In fact, the behaviour of foreign exchange rate is anomalous, since depreciation reduces export growth and it creates instability.

Keywords

Money supply, Foreign exchange rate, Liberalisation, Global crisis

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