In 1960, India was the largest producer and exporter of jute manufactures in the world. It accounted for 45 per cent of the estimated world production of jute manufactures, and for almost three-fourths of world exports. Jute goods were also the single most important export, which constituted 21 per cent of the country's total foreign exchange earnings. By 1970, India had lost this position of dominance in the world market. Although the Indian jute industry still accounted for 38 per cent of the world production, its share in world exports fell to less than 50 per cent of the total, and only 12 per cent of the value of Indian exports was attributable to jute manufactures.

The main changes in India's exports of jute manufactures over this period are summed up in Table 3.1. It shows that in the first half of the 1960s, exports grew steadily in terms of both value and volume, and that the foreign exchange earnings derived from jute goods reached a peak level of $384 million in 1965/66. After that, however, there was a marked and continuous decline in exports. The fall in export earnings was not as pronounced as that in volume, because of an increase in the unit value of exports. The improvement in unit value was partially a result of rising prices, and partially, as we shall show later, an index of a change in the type of jute manufactures exported.