The IMF Working Papers series is designed to make IMF staff research available to a wide audience. Almost 300 Working Papers are released each year, covering a wide range of theoretical and analytical topics, including balance of payments, monetary and fiscal issues, global liquidity, and national and international economic developments.
This paper estimates the short-term and long-run price and income elasticity of Indian
exports, and investigates the role of supply-side bottlenecks in shaping India's export
demand relationship. We use disaggregated export volume data for 45 Indian industries over
the period 1990-2013, as well as industry-specific international relative prices, for estimation.
Our results indicate that Indian exports are sensitive to international relative-price
competitiveness, world demand, and energy shortages. In addition, binding supply-side
constraints (notably energy shortages) dampen price responsiveness in the short-term.