52 SOCIAL SCIENTIST comprising machinery and transport equipment, chemicals and allied products, and metal manufactures including iron and steel has shown even less dynamism on the export front. The share of this sub-sector comprising manufactures in which the value added is relatively high, was more than 16 per cent of the total exports in 1981-82 and this had fallen to less than 11 per cent in the first six months of 1983-84. The rationale that has been put forward for continuing with an outward looking trade policy has been that the trade deficit in the last financial year has shown a tendency to decline. But if the trade performance in this period is examined one finds that the present trade policy has contributed very little to the decrease in trade deficit. The objective of this trade policy has been to step up exports substantially so that it can outstrip the increase in imports. In the last financial year, however, the opposite of the desired objective occurred. Instead of an increase in the growth rate of exports, the increase in imports fell and this contributed to a lower trade deficit. Moreover, the rate of increase in exports could be maintained only because the export of handicrafts, espedially of gems and jewellery, registered a significant increase. This can be gauged from the fact that while the increase in exports in the first six months of 1983-84 over the corresponding period in 1982-83 was about Rs 200 crores, the increase in the export of gems and jewellery in the same period was about Rs 500 crores. The decrease in the growth rate of imports was brought about by a very narrow range of commodities. The petroleum and petroleum products' import was solely responsible for this. The pattern of trade that has been emerging in the liberal trade regime shows that the Indian economy has been doubly affected. The volume of exports has tended to remain sticky with the share of manufactured items falling over time. At the same time the range of imports has increased and this implies that the dependence of the economy on imports, especially of capital goods, has increased in the last three years. What the present trade policy has succeeded in doing is that it has been breaking the structure of industrialisation in the country. From the Second Plan, India had been following an industrialisation path in which the captial goods sector was the prime mover. In the following period this sector was strengthened further which enabled it to meet the demands of other sectors of the economy. The existence of a captial goods sector had assisted in the development of an indigenous technological base. In several key sectors of the economy like power and fertilizers, indigenous technology has been developed with close links with the capital goods sector. The basic approach of the export-import policy should have been to strengthen this indigenous effort but instead it has chosen to undermine this. BISWAJIT DHAR Research Student of Economics, Jawaharlal Nehru University, New Delhi.