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Mineral export and economic growth in
India: evidence from VAR model analysis

Auro Kumar Sahoo, Naresh Chandra

Sahu, Dukhabandhu Sahoo & Bibhuti
Bhusan Pradhan

Mineral Economics
Raw Materials Report

ISSN 2191-2203
Volume 27
Number 1

Miner Econ (2014) 27:51-58

DOI 10.1007/s13563-014-0047-7

1 23
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 Author's personal copy
Miner Econ (2014) 27:51–58
DOI 10.1007/s13563-014-0047-7
ORIGINAL PAPER
Mineral export and economic growth in India: evidence
from VAR model analysis
Auro Kumar Sahoo & Naresh Chandra Sahu &
Dukhabandhu Sahoo & Bibhuti Bhusan Pradhan
Received: 8 October 2013 / Accepted: 25 April 2014 / Published online: 20 May 2014
# Springer-Verlag Berlin Heidelberg 2014
Abstract Mineral resource is one of the important natural
resources of India which contributes to the national income
through mineral export earnings and acts as an important input
for the industrial sector of domestic economy. In this paper, an
attempt has been made to explore the dynamic relationship
among mineral export, economic growth and industrial produc-
tion in India over the period from 1981 to 2010. The present
study is based on secondary data which is extracted from the
Reserve Bank of India database on Indian economy. We have
adopted a vector auto regression (VAR) model analysis based
upon impulse response function (IRF) and variance decompo-
sition (VD) to find out the relationship among variables. The
result of IRF suggests that economic growth responses posi-
tively to a shock in mining export, whereas industrial produc-
tion responses in a negative way. It has been found that mining
export is not contributing at large towards industrial production
of India in the short run, but in the long run, a significant share
of industrial production is caused by mining export. It is also
found that both industrial production and economic growth
explain for variation in mineral export in India in the long run.
Keywords Mining export . Net national product . VAR
model . Impulse response function . India
JEL classification Q 32
A. K. Sahoo (*) : N. C. Sahu : D. Sahoo : B. B. Pradhan
School of HSS & M, Indian Institute of Technology, Toshali Bhawan,
Satya Nagar, Bhubaneswar, Odisha 751007, India
e-mail: aks11@iitbbs.ac.in
N. C. Sahu
e-mail: naresh@iitbbs.ac.in
D. Sahoo
e-mail: dsahoo@iitbbs.ac.in
B. B. Pradhan
e-mail: bibhutibhusan.eco@gmail.com
Introduction
The long-run dynamics of the relationship between export and
economic growth has received a considerable attention from
researchers both in developed and developing countries of the
world. Numbers of studies have focused on finding the causal
relationship between export and economic growth in the con-
text of developing countries. Most of the developing countries
of the world are primary sector dependent where a large share
of their export comes from a primary sector which comprises
agriculture, forestry, fishing and mining. India is one of the
developing countries of the world which is enriched with huge
natural resource, among which mining resource holds an im-
portant position. Indian mineral industry plays a vital role not
only in the domestic economy but also in world mineral market.
India has experienced a noticeable growth in the mineral
production both in terms of quantity and value. The Indian
mineral sector comprising 87 minerals, which includes 4 fuels,
10 metallic, 47 non-metallic, 3 atomic and 23 minor minerals.
Fuel minerals account for 68 % of total value of mineral
production which is highest among all types of minerals
produced in India. In the group of minerals, metallic, minor
and non-metallic minerals account for 19, 11 and 2 % of total
value of mineral production in India. The details on mineral
production and mineral export are depicted in Fig. 1 as given
below. In the year 2010–11, the index of mineral production
(base 1993–94=100) for all minerals (excluding atomic) has
stood at 204.95 points which was 175.96 and 193.36 for the
years 2008–09 and 2009–10, respectively. The total value of
mineral production (including minor minerals but excluding
atomic minerals) has showed an increase in about 17 % in the
year 2010–11 as compared to the figure of previous year. In
2010–11, the contribution of mining and quarrying sector is
2.67 % of the total gross domestic product (GDP) of India
(IMY 2011). Similarly, the production of minerals in terms of
value is Rs. 2, 32,021 crore (IMY 2011) which shows an
 Author's personal copy
52
increase of 17 % as compared to the previous year. The Indian
mineral sector is producing various types of minerals which
are not only consumed by the domestic economy but also
exported to the rest of the world.
India is a leading exporter of mineral and ores to 188
countries of the world in the year 2010–11. The total value
of mineral export of India was Rs. 1,740 crore in 1990–91
(RBI 2010–11) which rose up to Rs. 1, 65,080 crore in 2010–
11 (IMY 2011). Minerals and ores hold a significant place in
the export basket of India. In the year 2010–11, the total value
of export of mineral and ores accounted for 14.45 % of total
value of merchandise export of India. In the world mineral
production, India has a significant position with respect to
some minerals. It holds second position with a contribution of
19.1 and 14.3 % of world production of baryte and chromite,
respectively. Similarly, Indian mineral sector is holding third
position in production of coal and lignite, fourth position in
production of steel and iron ore and sixth position in the
production of bauxite and manganese ore in the world.
However, export of diamond holds the top position in terms
of value generation followed by iron ore, granite and alumina.
Over the years, empirical studies have been made in India
to find out the relationship between export and economic
growth. However, no empirical study has been carried out to
explore the relationship between mineral export and economic
growth in India. The present study empirically tries to find out
the relationship among mineral export, economic growth and
industrial production from 1981 to 2010. The vector auto
regression (VAR) technique has been adopted to find out the
relationship among variables. The rest of the paper is
organised as follows: ‘Literature review’ briefly explains the
review of existing literature on export-led growth hypothesis
and contribution of mining sector towards development,
‘Methodology and model specification’ discusses the meth-
odology and econometric models adopted for the present
study, ‘Results and discussion’ analyses the empirical results
and ‘Conclusion and policy implication’ concludes the study
with some policy implications.
Literature review
Mining resource and its development dimension is studied by
many researchers, but the study specific to the relationship
between mining export and economic growth is limited. Many
studies have focused on the social and economic impact of
mineral sector. The allocation of resources from manufactur-
ing sector to primary sectors during the boom period has
resulted in huge export of primary products. It has led to the
appreciation of domestic currency, and as a result of which,
both the domestic economy and external sector are disturbed
(Williams, 2011). Besides this, the inefficiency in manage-
ment and utilisation of resource revenue has hindered the
A. K. Sahoo et al.
economic growth process of a resource-abundant country.
Gelb (1988) argues that large mineral endowment is a curse
rather than a blessing for a country which lowers the economic
growth. The possible reasons for lower economic growth are
economic and political factors (Gelb 1988; Auty 1993). It is
also found that in the case of mineral-rich countries, economic
growth can also be slowed down due to trade policy, invest-
ment rates, terms of trade volatility, income inequality and
bureaucratic inefficiency (Sachs and Warner 1995).
However, many researchers have focused on the impact of
mining on different sections of society. The mining dependence
and its impact towards development have been studied both in
case of developed and developing countries. In a study,
Papyrakis and Gerlagh (2007) found a negative relation be-
tween mining activity and socio economic development in the
USA. On the contrary, studies on Spain and Australia have
supported for improvement in quality of life and socioeconomic
development in the region as a result of large mining activities
(Domenech 2008; Hajkowicz et al. 2011). In context of India,
Mishra (2009) has found a positive impact of mining towards
financial capital and social connection. In addition, they found
that mining has numerous health hazards and adversely affects
the natural capital of the study area. Similarly, mining proximity
has been found to improve local employment at the cost of
reduced forest quality and forest benefits and associated with
human illness (Pattanayak et al. 2010).
Mining is not only associated with local and industrial
development but the mineral export also contributes to nation-
al income. The relationship between export and economic
growth is still an unsolved puzzle. Although many studies
have been undertaken to unravel the phenomenon in general,
no specific study has been found focusing on the relationship
between mineral export and economic growth. However, the
literature is enriched with studies on export-led growth. The
relationship between export and economic growth is investi-
gated by many researchers in context to both developing and
developed countries. In the existing literature, direction of
causation is examined, and the results are found to be mixed
in nature. Some of the research supported for the existence of
unidirectional causality from export to growth, popularly
known as export-led growth. The export-led growth hypoth-
esis suggests for the expansion of export and competitiveness
with the foreign countries, improves the allocation of re-
sources, technological progress and economies of scale which
creates a positive environment for different sectors through
specialised input (Balassa 1978; Krueger 1980; Edwards
1998; Ben-David and Loewy 1998).
The relationship among real export, real import and eco-
nomic growth is found to have a long-run equilibrium for
Pakistan, and the multivariate Granger causality suggests for
a unidirectional causality from export to output (Shirazi and
Manap 2005). Similarly, the empirical investigation supports
the existence of export-led growth based on the result of
 Author's personal copy
Mineral export and economic growth in India
Fig. 1 Composition of mineral
production and export
unidirectional causality from export to economic growth
(Jordaan and Eita 2007; Ullah et al. 2009). The manufacturing
and primary export for Chile is found to affect economic
growth through increased productivity (Siliverstovs and
Herzer 2006). However, some studies disapprove the export-
led growth hypothesis which include Jung and Marshall
(1985), Ahmad and Kawn (1991) and Sharma and
Panagiotidis (2004). The causal link between real export and
economic growth based on VAR approach is found to have a
bidirectional causality (Awokuse 2005, 2006). However,
Huang and Wang (2007) have found the existence of an
export-led growth for two newly industrialised countries
such as Korea and Taiwan. Lim et al. (2010) have examined
the long-run equilibrium relationship between GDP growth
and export based on both linear and non-linear cointegration
analysis. The study has found the existence of a non-linear
cointegration in favour of Singapore whereas both linear and
non-linear cointegration for South Korea.
In Indian context, a couple of studies have been undertaken
on export-led growth hypothesis. Jung and Marshall (1985)
found no causal relationship between real export growth and
real income growth in the case of India. Similarly, the inves-
tigation made by Asafu-Adjaye and Chakraborty (1999) and
Anwer and Sampath (2001) found no evidence of the exis-
tence of export-led growth and no causal relationship between
exports, real output and import in India. On the contrary,
Dhawan and Biswal (1999) investigated the export-led growth
hypothesis using a vector auto regression (VAR) model and
found the existence of a long-run equilibrium relationship
among real GDP, real export and terms of trade. Moreover,
the study found a unidirectional causal relationship from GDP
and terms of trade to export. In some of the recent studies,
unidirectional causality has been found from export to eco-
nomic growth which holds the existence of export-led growth
in India (Dawson 2005; Singh and Konya 2006; Dash 2009).
The empirical study made by Nidugala (2001) supports the
existence of export-led growth in India and found that the
growth of manufactured export has a significant effect on
GDP growth. However, some of the studies found the
53
existence of bidirectional causality between export and eco-
nomic growth (Chandra 2003; M-ud 2004). Mallick (1996),
using the time series data for the period of 1950–92 and
employing Engle-Granger cointegration and error correction
mechanism, found a long-run equilibrium relationship be-
tween income and export. In addition to this, the study reveals
the presence of growth-led exports in India. Paul Biru and
Anupam (2012) have found the presence of export-led growth
in India for the liberalisation period whereas no impact of
export growth on the output growth for the period 1960–2009.
After going through the related literature, we are trying to
explore the relationship among Indian mining export, eco-
nomic growth and industrial production, based upon the fol-
lowing methodology.
Methodology and model specification
The annual time series data on net national product (NNP),
mineral export (MINX) and industrial production index (IIP)
have been used for the present study. The data are extracted
from the database on Indian economy, Reserve Bank of India
(RBI). The sample period ranges from 1981 to 2010. All
variables except mineral export value are at a constant 2004
base price. Since data on mineral export value is not available
at constant prices, it is deflated by the wholesale price index
(WPI) of 2004. All data are converted into the natural loga-
rithms for the present analysis. The variable description and
their specifications for empirical analysis are as follows:
& NNP: net national product at factor cost.
& MINX: total value of mineral export from India.
& IIP: index of industrial production.
Test of stationarity
Before going for any empirical analysis in time series data, it is
a precondition to check the properties of data. The stationarity
 Author's personal copy
54 A. K. Sahoo et al.

properties of data has been checked using Augmented Dickey
and Fuller (1981) procedure which corrects for higher order
serial correlation by using the lagged differenced term as an
explanatory variable.
In addition to the Augmented Dickey Fuller (ADF)
test, Perron and Perron (1988) unit root test is used for
confirmation of the stationarity of the variables. The
Phillips and Perron procedure of testing unit root is an
alternative to the ADF procedure. This procedure is neu-
tral on selecting lag length in the ADF procedure, as well
as it controls the problem of heteroscedasticity and serial
correlation of the error term. Moreover, the Kwiatkowski-
Phillips-Schmidt-Shin (KPSS) unit root test as given by
Kwiatkowski et al. (1992) is used for the conformity of
stationarity of the data.
VAR model specification
VAR model is widely used to examine the dynamic
relationship among variables. The advantage of adoption
of a VAR procedure is that when among the variables,
the exact relationship is unknown, and variables are
supposed to be simultaneously determined and consid-
ered as endogenous in the system. In accordance to the
existing literature pertaining to export and economic
growth, the relationship is not unique and found to be
versatile. In a system of ‘n’ variables VAR model, each
variable is explained by both the lagged value of own
and lagged value of other n−1 variables. The VAR
model of our present study could be expressed in a
matrix form as given below.

2 3 2 3 2 32 3 2 32 3 2 32 3 2 3
xt β10 a11 ⋯ a1n xt−1 δ11 ⋯ δ1n yt−1 ρ11 ⋯ ρ1n zt−1 ε1t
4 yt 5 ¼ 4 β20 5 þ 4 ⋮ ⋱ ⋮ 54 ⋮ 5 þ 4 ⋮ ⋱ ⋮ 54 ⋮ 5 þ 4 ⋮ ⋱ ⋮ 54 ⋮ 5 þ 4 ε2t 5 ð1Þ
zt β30 a31 ⋯ a3n xt−n δ31 ⋯ δ3n yt−n ρ31 ⋯ ρ3n zt−n ε3t

2 3 2 3 2 3
where, xt, yt and zt are endogenous variables that are NNP, xt−1 yt−1 zt−1
MINX and IIP, respectively. The endogenous variables are x ¼ 4 ⋮ 5; y ¼ 4 ⋮ 5; and z ¼ 4 ⋮ 5
assumed to be stationary in nature. To explain the above xt−n yt−n zt−n
equation, it can be written in a simple form.
X t ¼ β þ ax þ δy þ ρz þ ε: ð2Þ

In the Eq. (2) we have captured the lagged value of NNP, Similarly, we have represented α, δ and ρ as three matrix of
MINX and IIP in the vectors x, y and z, respectively, which can coefficient for the lagged endogenous variable which can be
be written as follows: written as follows:

2 3 2 3 2 3
a11 ⋯ a1n δ11 ⋯ δ1n ρ11 ⋯ ρ1n
a ¼ 4⋮ ⋱ ⋮ 5; δ ¼ 4 ⋮ ⋱ ⋮ 5; and ρ ¼ 4 ⋮ ⋱ ⋮ 5:
a31 ⋯ a3n δ31 ⋯ δ3n ρ31 ⋯ ρ3n

The disturbance term ε1t, ε2t and ε3t are white noise. In this
study, we have estimated the relationship between national
income of India, value of mineral export and industrial pro-
duction based upon the above procedure, and the results are
analysed in the following section.
Impulse response function (IRF) and variance decomposition
(VD)
each concerned variables in the linear system to a shock
from system variables, and the VDs show the portion of
the variance in the forecast error for each variable due
to innovations to all variables in the system (Enders
1995). In the following section, the results of unit root
test and VAR estimation are analysed. In addition to
this, the relative influence of variables is discussed in
details based on the results of IRFs and VDs.

In a VAR model, the coefficient cannot be interpreted

directly. Therefore, we have adopted the innovation-
accounting techniques which consist of variance decom-
position (VD) and impulse response function (IRF). The
VD and IRF examine the relative impact of each vari-
able on other variables. The IRF shows the response of
Results and discussion
The results of the stationarity test using Augmented
Dicky Fuller (ADF), Phillips Perron (PP) and
Kwiatkowski-Phillips-Sc hmidt-Shin (KPSS) are
 Author's personal copy
Mineral export and economic growth in India 55

Table 1 Stationarity test result

Variable Type Level First difference

Test statistic Test critical at 1 % Test statistic Test critical at 1 %

Log(NNP) ADF 14.58 −2.64 −4.60a −3.68

PP 14.58 −2.64 −4.61a −3.68
KPSS 0.17 0.21 0.33a 0.21
Log(MINX) ADF 1.30 −2.64 −3.00a −2.65
PP 1.41 −2.64 −5.28a −2.65
KPSS 0.15 0.21 0.29a 0.21
Log(IIP) ADF 11.57 −2.64 −3.86a −3.68
PP 10.04 −2.64 −3.76a −3.68
KPSS 0.19 0.21 0.26a 0.21
a
Significant at 1 % level

presented in Table 1. In the ADF and PP tests, the null In Fig. 2, the second row shows the responses of MINX to
hypothesis is non-stationary of a variable against the shock in NNP and IIP. As a result of a shock in NNP, MINX
alternative hypothesis stationary of a variable. responds negatively up to 3 years. But after that, it again
However, the ADF and PP test results have been becomes positive. Similarly, MINX responds positively to a
criticised when the stationary result is obtained near shock in IIP. The impulse response function suggests that a
the non-stationary boundary. The KPSS test will tackle shock to NNP leads to a decrease in mineral export up to the
this problem by testing the hypothesis in a reverse way. third year. Moreover, it is found that a shock to either MINX
In the KPSS test, the null hypothesis is stationary of a or IIP will have an impact up to 10 years after which it
variable against the alternative hypothesis non-stationary disappears. The third row in the same figure shows the re-
of a variable. The result of ADF test, PP test and KPSS sponses of industrial production to a shock in mineral export
test reveals that all variables are stationary at their first and NNP. Industrial production is found to respond negatively
difference. Hence, it is concluded that all variables are inte- to a shock in either mineral export or NNP.
grated of order 1, technically known as I (1) process.
The next step after confirmation of order of integration is to
estimate the appropriate VAR model. The variables during Variance decomposition
estimation of VAR model are employed on their stationary
level. An important aspect of specification of VAR model is The result of variance decomposition is presented in Table 3.
lag-length selection. The lag-length selection in the present The variance decomposition of NNP shows that NNP is
VAR estimation has been based upon the Akaike information largely explained by its own shock followed by IIP and then
criterion (AIC), Schwarz information criterion (SIC) and very less by MINX. Although in the initial period it is largely
Hannan-Quinn information criterion (HQC). The details on explained by itself, the explanatory power goes on declining
lag selection have been provided in Table 2.
Perusal of the above table reveals that AIC, SIC and HQC Table 2 Lag selection criterion
suggest for lag 6, whereas only LR suggests for lag 5. Based
Lag LR AIC SIC HQC
on the above results, we have selected lag 6 for our analysis.
0 – −9.64 −9.49 −9.60
1 8.07 −9.28 −8.69 −9.13
Impulse response function result 2 10.85 −9.18 −8.14 −8.92
3 7.48 −8.97 −7.49 −8.60
The result of impulse response function is presented in Fig. 2. 4 7.98 −8.98 −7.06 −8.50
The first row of the figure shows the responses of NNP to a 5 21.55a −11.28 −8.91 −10.68
shock in MINX and IIP. The NNP is found to respond posi- 6 13.99 −14.00a −11.18a −13.29a
tively to a shock in MINX from the first year to third year.
However, the NNP does not influence a shock in IIP for the LR sequential-modified LR test statistic
a
same period. Indicates lag order selected by the criterion
 Author's personal copy
56 A. K. Sahoo et al.

Response to Cholesky One S.D. Innovations±2 S.E.

Response of D( LOG(NNP)) to D( LOG(NNP) ) Response of D( LOG( NNP)) to D( LOG( MINX) ) Response of D( LOG( NNP) ) to D( LOG( IIP))
.04 .04 .04

.02 .02 .02

.00 .00 .00

-.02 -.02 -.02

-.04 -.04 -.04

1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10

Response of D( LOG( MINX) ) to D( LOG(NNP) ) Response of D( LOG( MINX) ) to D( LOG( MINX)) Response of D(LOG( MINX) ) to D( LOG( IIP))
.3 .3 .3

.2 .2 .2

.1 .1 .1

.0 .0 .0

-.1 -.1 -.1

-.2 -.2 -.2

-.3 -.3 -.3

1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10

Response of D( LOG( IIP) ) to D( LOG( NNP)) Response of D(LOG( IIP) ) to D( LOG( MINX)) Response of D(LOG( IIP) ) to D( LOG( IIP))
.06 .06 .06

.04 .04 .04

.02 .02 .02

.00 .00 .00

-.02 -.02 -.02

-.04 -.04 -.04

-.06 -.06 -.06

1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10 1 2 3 4 5 6 7 8 9 10

Fig. 2 Results of impulse response function

very slowly over time. The result of 1-step ahead the horizon
depicts that NNP is fully explained by itself. However, in the
3-step ahead horizon, the percentage of NNP to total variance
declines due to the relative more explanation of variance by
MINX and IIP with 6.50 and 0.05 %, respectively. Similar
kinds of result have been found even up to 6 steps ahead the
time horizon. Interestingly, at 7 steps ahead the time horizon,
IIP explains relatively higher percentage of the total variance
than the MINX, and the same results prevail even after 10
steps ahead the time horizon. Nevertheless, at the 10 steps
ahead the time horizon, 84 % of the variance is explained by
its own innovation followed by nearly 11 % of variance by the
IIP and 5 % by the MINX.
The variance decomposition of MINX shows that it is
explained by both itself and the NNP. However, in 1 step
ahead the time horizon, NNP holds 51.38 % of the total
variance followed by its own innovation by 48.61 % of the
total variance. IIP has no contribution in the total variance in
the 1 step ahead the time horizon but from 2 steps onwards, it
explained for the total variance. The results depict that after 10
steps ahead the time horizon, NNP accounts 68.94 % of the
total variance followed by IIP and MINX with 16.18 and
14.87 % of total variance, respectively.
The results of variance decomposition of IIP suggest that in
1 step ahead the time horizon, it is largely explained by NNP
and its own shock. However, after 3 steps ahead the time
horizon, MINX explains 6.68 % of the total variance of IIP.
NNP has a dominant role in explaining the total variance even
after 10 steps ahead the time horizon. After 10 steps ahead the
times horizon, NNP explains 69.66 % of the total variance

Table 3 Results of variance decomposition

Period Variance decomposition of NNP Variance decomposition of MINX Variance decomposition of IIP

NNP MINX IIP NNP MINX IIP NNP MINX IIP

1 100 0.00 0.00 51.38 48.61 0.00 87.24 0.30 12.44

2 93.44 6.50 0.05 51.57 26.02 22.39 85.83 0.33 13.83
3 93.38 6.50 0.11 50.86 28.29 20.84 80.70 6.68 12.60
4 91.12 6.34 2.52 51.11 28.15 20.73 74.74 5.97 19.27
5 90.24 5.82 3.93 56.17 24.95 18.86 74.76 6.49 18.73
6 87.33 6.97 5.88 68.76 16.83 14.39 73.00 8.62 18.36
7 84.85 6.16 8.98 64.73 15.50 19.76 71.97 8.65 19.36
8 84.84 5.95 9.20 66.67 15.47 17.85 71.14 7.61 21.24
9 84.72 5.53 9.74 69.03 14.68 16.27 71.57 7.86 20.56
10 83.85 5.60 10.53 68.94 14.87 16.18 69.66 5.91 24.42
 Author's personal copy
Mineral export and economic growth in India
followed by IIP itself with 24.42 % and MINX with 5.91 % of
the total variance. This suggests that mining export is contrib-
uting largely to the industrial production in the long run as
compared to the short run.
Conclusion and policy implication
The results of the study based upon modern econometric tools
such as impulse response function and variance decomposi-
tion reveal that in the short run, mining export is largely
explained by both its own innovation and economic growth.
However, the industrial production has relatively less impact
on mining export in the short run as compared to the long run.
It is found that economic growth responds positively to a
shock in mining export whereas negatively to the industrial
production. Similarly, economic growth is largely explained
by its own innovation in the short run, whereas in the long-
run, industrial production and mining export explain the eco-
nomic growth. The results reveal that industrial production
responds negatively to a shock in either mining export or
economic growth. The industrial production is largely ex-
plained by the economic growth. However, in the long-run,
mining export has a contribution to the industrial production.
In the present paper, we found that mineral export has long-
term impact on both the economic growth and industrial
production of India. Based on the results, the policy implica-
tions of the study suggest that the Government of India should
emphasise on the proper mineral extraction and export which
will enhance economic growth. In addition, it should formu-
late sustainable policies and programmes related to mineral
export and its proper utilisation to augment the national wel-
fare of India. Moreover, export promotion measures should be
undertaken for higher mineral exports of India. At the same
time, local area development plan and infrastructure develop-
ment should be carried out to generate plethora of employ-
ment opportunities and to increase social welfare in the min-
ing area.
Acknowledgments We would like to thank Magnus Ericsson, Patrik
Söderholm, Linda Wårell and anonymous reviewers of this journal for
their constructive comments and valuable suggestions. Moreover, we are
highly thankful to University Grants Commissions, India for their finan-
cial support.
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