India's Trade With Japan Constraints and Opportunities

Dr. Abraham Joseph studies the constraints and opportunities for India to diversify exports to Japan between the First and Sixth Plan periods. He explains that a high concentration of non-manufactured exports to Japan is not a desirable element as it causes instability in export earnings in the short run, while the rate of return in the long run would decline. Examining the possibility for India to switch over to a new trading framework with Japan in manufacturers, Dr. Joseph states that with India’s rich factor endowments, it was possible for India to move into this framework. However, during this period, the author demonstrated that production efficiency in Indian industries had inhibited diversification to Japan. Internal industrial production factors had militated against an expansion of export manufactures. Unless these internal barriers are eliminated, it will be difficult for India to compete in the Japanese market, no matter how low levels of protection may be.