There were two important economic announcements on Thursday—the monsoon forecast and trade policy. Ten years ago, the former would have been far more important than the latter. That is no longer the case, an indication of a deep structural change in the economy.
Though two out of every three Indians still work in agriculture, the contribution of this sector to our GDP is falling. It now accounts for less than a fifth of the economy—or around $170 billion. The commerce minister said while announcing the new trade policy that exports would touch $160 billion in 2007-08. Even though we are puzzled why the government insists on announcing such “export targets,” there is enough reason to believe that exports will indeed be in the region of $160 billion this year. In other words, agriculture and exports will be of equal importance to the economy. And, a year later, exports will become the more important sector.