Journal of African Development

This paper investigates the intricate connection between Indian export and employment growth for the period 2000–2023. Based on several data sources such as DGFT, NSSO, PLFS, RBI and AS), the paper uses descriptive analysis, trend growth rates and comparative methods to empirically find out if India’s significant export expansion has been able create productive employment. We find a paradox: while the total exports of India grew from $60.8 billion in 2000-01 to $744.7 billion in 2022-23 at annual compound growth rate (CAGR) of 12.4%, no commensurate increase is seen in the formal employment numbers. The paper finds substantial sectoral heterogeneity in employment elasticities, with basic labour-intensive sectors having the higher job-creating potential relative to capital intensive and services exports. The main findings suggest that there are structural changes in on the export composition towards less labour-intensive sectors, regional concentration of benefits from exports and the increasing importance of services exports which create fewer jobs per dollar of exports. The paper concludes with policy suggestions to improve the employment intensity of India's export basket through targeted initiatives in labour-intensive manufacturing, skill formation and regional diversification.

JEL Codes: F16, O14, O19, J20 Acknowledgements We thank seminar participants at the National Council of Applied Economic Research for useful comments