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Measuring the Impact of Import Substitution and Export Promotion on India's GDP Growth: An Econometric Analysis toward Viksit Bharat@2047

My recent paper "Measuring the Impact of Import Substitution and Export Promotion on India's GDP Growth: An Econometric Analysis toward Viksit Bharat@2047," empirically examines whether these policy paradigms are substitutes or complementary components of India's long-run growth process.
Using annual data for 1991–2025, the study estimates a Johansen cointegration framework, a Vector Error Correction Model (VECM), impulse response functions and a moderation model to analyse the interactions among GDP, manufacturing, exports and technological capability.
Three findings emerge.
  • First, manufacturing provides structural depth: Manufacturing value added has a strong long-run association with GDP and serves as an anchor of India’s equilibrium growth path.
  • Second, exports expand the growth frontier: Export shocks produce persistent and progressively positive effects on GDP, rather than merely providing a temporary demand stimulus.
  • Third, technology determines how effectively exports translate into growth: ICT imports (a proxy of technology import) do not show a significant direct short-term impact on GDP. Their contribution operates indirectly—by strengthening export growth, supporting manufacturing and improving the productivity content of India’s global integration. Importantly, the moderation analysis suggests that exports do not automatically generate growth. Their impact becomes stronger as technological capability rises and turns positive only after a critical capability threshold is crossed. Export promotion, therefore, cannot be treated as a standalone strategy.
Taken together, these findings suggest that the policy debate may be better framed as one of policy complementarity rather than policy choice. Industrial deepening, export competitiveness and technological capability appear to function as mutually reinforcing components of India's structural transformation.
From this perspective, Atmanirbhar Bharat can be interpreted not as inward-looking protectionism, but as a framework for building domestic productive capabilities that support deeper and more competitive global integration.
I hope the paper contributes, in a modest way, to the ongoing discussion on India's growth strategy as the country advances towards the ambition of becoming a developed economy by 2047.
Looking forward to receiving your feedback at pinaki_mukherjee@zohomail.in