Macro Factor Analysis of Scientific Instruments Export Industries in Ambala Cluster of India

Abstract

Micro Small and Medium Enterprises (MSMEs) is major industrial base of Indian economy and provide vibrant growth to all the industrial sectors with dynamic production and exports. This sector is emerged as focused area in industry from last five decades in India. MSMEs has provided largest employment opportunity in the country after the agricultural sector, thus MSME contributes in to the economic development of the nation. MSMEs have contributed a lot in terms of 33% of the manufacturing output, 6% of the country’s GDP, and almost 45% of the exports. Scientific instruments industry is a vital industry for the country. Further, Indian scientific instruments industry also provides technical and industrial inputs for the manufacturing sector as providing inputs or raw material. It also provides help to the economy in earning foreign exchange. This study covers the Ambala cluster of scientific instrument export industry and this cluster has its existence before independence. The historical background of Ambala scientific instruments export industry shows that it is based on pre independence time 100 years back. Ambala scientific instruments cluster has more than 3,000 units of various types are engaged in exports. This cluster of scientific instruments export industry is based on approx Rs. 1,700 crore using conventional and innovative production methods. More than 30,000 employees are directly employed in this industry in Ambala. The Ambala cluster is believed to be the largest in the country for manufacturing scientific instruments and apparatus. Total 150 export firms are studied and multiple regression model is used to evaluate the export performance based on macro factors. The export performance of a firm is significantly depends on the real its exchange rate of host country as compare to the other trading countries in foreign market. The gross domestic product of a country also affects the performance of exports of all the firms. Exports of a firm are also affected by domestic inflation of that country. There is perspective view that foreign direct investment (FDI) promotes exports of host country through various environment issues of investment and capital.