RBI HANDBOOK OF STATISTICS ON INDIAN STATES (2024–25)

NEWS – Recent analysis of the RBI Handbook of Statistics on Indian States (2024–25) shows that India’s export growth, despite strong aggregate numbers, is becoming increasingly regionally concentrated, raising concerns about inclusive development and employment generation.

HIGHLIGHTS

Core–Periphery Pattern in Exports

• Top five States — Maharashtra, Gujarat, Tamil Nadu, Karnataka and Uttar Pradesh — account for nearly 70% of India’s exports.
• Five years ago, their share was ~65%, indicating rising concentration.
• The Herfindahl–Hirschman Index (HHI) of export geography is increasing, signalling a top-heavy export structure.
• Coastal western and southern States are integrating deeper into global value chains, while northern and eastern hinterland States are lagging.

Global Trade Constraints

• WTO data shows global merchandise trade growth slowing to 0.5–3%.
• UNCTAD (2023): Top 10 exporters control ~55% of world trade.
• Global capital now favours:
  • Economic complexity
  • Dense supply chains
  • Logistics precision
• Low-skill, labour-intensive industrialisation windows are closing globally.

Shift from Labour to Capital

• Annual Survey of Industries (ASI) 2022–23:
  • Fixed capital grew 10.6%
  • Employment grew only 7.4%
  • Fixed capital per worker: ₹23.6 lakh
• Indicates capital deepening, not labour absorption.
• Export growth increasingly reflects value, not employment volume.

Weak Employment Linkages

• PLFS data:
  • Manufacturing employment stagnant at ~11.6–12% of total workforce.
• Employment elasticity of exports has collapsed.
• High-growth sectors (electronics, petrochemicals) are capital-intensive and spatially sticky (e.g., Kancheepuram, Noida).

Financial & Human Capital Divide

• Credit–Deposit (CD) Ratios:
  • Export States (TN, AP): >90%
  • Hinterland States (Bihar, eastern UP): <50%
• Result:
  • Savings from poorer regions finance industrial hubs elsewhere.
• Human capital deficits further block entry into high-complexity exports.

Conclusion

India’s exports are no longer a pathway to development, but a reflection of pre-existing capacity. Export growth, by itself, is failing to deliver labour-intensive industrialisation or regional convergence. For inclusive growth, India must move beyond export-centric metrics and invest in state capacity, skills, logistics, and financial depth across lagging regions.