Indian exports are steadily underwriting the country’s growth story. Year after year, the numbers have been rising at the rate of 20%. This year, too, trade numbers followed a similar trail, with exports touching $100 billion. According to the department of commerce, merchandise exports for fiscal 2005-06 rose by approximately 25% over the previous fiscal.

These figures offer proof of the upward mobility of India’s export graph. A closer look at the trends shows that Indian ex-ports have become less volatile; exporters have widened their market base; and the trade basket is expanding. Services acc-ount for a large percentage of total ex-ports. In 2004-05, services ex-ports grew by 71% to $46 billion and by January 2006 had surpassed the previous year’s performance with 75% growth.

Software services constitute a major portion of the total package. According to Nasscom, software services exports grew by over 33% in 2005-06 to $17.3 billion. Demand has been strong in traditional as well as new service sectors—supply management, engineering applications and a host of other such areas.

Adding to this buoyancy is the fact that Indian exports have become more res-ilient to exchange rate fluctuations. It is no longer a fear that a stronger rupee will lead to a drop in exports—a view that was quite common even in the late 90s.

India no longer needs a weak rupee to make its products price competitive. However, one must not look at Indian exports in isolation. A recent report observed: “It must be seen in the context of buoyant world economic growth in the region of over 4% a year, as well as world exports, which grew by 5%, 17% and 21%, respectively in the past three years.” Current trends, however, suggest that India has kept apace with global standards. Revenues have risen across most products—textiles, farm produce, meat and allied products, iron and steel, machinery, software and electronic goods—ranging between 5% to 15%, both in volume and value. These figures indicate that Indian exports are no longer dependent on the changing value of the rupee. Does this mean that Indian goods have found themselves a market that is price inelastic? Does the demand for Indian exports no longer depend on how cheaply these goods can be produced?

While there may be no uniform reply across sectors, a certain consistency can be seen in some segments of Indian indus-try. There are numerous instances of key industries that have broken the price barrier to become an integral link in the global supply chain of large MNCs.

For instance, the textile and automobile ancillaries industry. Auto ancillaries exports grew by 33% in the last three years. Textiles exports, after a brief choke up, grew by 25% in 2005-06. In both industries, growth has come significantly from supply contracts with some of the world’s largest automobile companies and retailers. These contracts promote long-term alliances and supply of large volumes. Both these factors are critical in creating an export basket that can withstand exchange rate and other such shocks.

A similar story is unfolding in the manufacturing sector where exports have risen by 9% in the last two years. To a large extent, this surge can be attributed to the strengthening of the Indian machinery and mechanical appliances sectors, apart from an overall rise in demand for steel in the world. According to a recent report, the nature of manufacturing exports from India suggests that we could be becoming internationally competitive.

The other trend scaling up optimism over exports is the emerging pattern of trade. While the US and the UK remain dominant markets, Indian companies are making gains in newer geographies such as Asia, Africa and Latin America. China and Singapore are India’s third and fourth largest trading partners, respectively.

For trade analysts, it’s a good sign. With India expanding its export base, it is spreading its risks and increasing the scope of its trade relationship. This is the perfect buffer against a trade disaster. With the export basket filling up with a wider range of products and services, and the markets expanding, exports are looking to establish their presence globally. The years ahead will be a test of patience, perseverance and skill as they do so.

—The writer is CEO, India Brand Equity Foundation and dy director general, CII. These are his personal views

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