India's Foreign Trade Statistics

Transcription

1 India's Foreign Trade Statistics Each country tries to increase the availability of goods and services to its people through purchase from other countries. Similarly it tries to sell its surplus production to other countries. Buying of goods from other countries is called imports and selling of good to others countries is called exports. Both exports and import constitute to the foreign trade of a country. However, foreign trade does not include sale purchase of only goods but also that of services shipping, insurance, banking, constancy services etc. Here, we will take into account India's Foreign Trade. Composition of India's Exports Composition of exports means goods that we are selling to other countries. At time of Independence, our exports consisted mainly of Agricultural Products like tea, spices, tobacco, and other raw materials etc. With industrialization composition of exports have undergone a change. Many raw materials that we exported earlier are now being used in newly developed industries. Efforts were made to diversify and expand our exports. It was necessary as imports were increasing. India's exports are now divided into four broad categories. Goods Export's Composition Primary Products Manufactured Goods Petroleum Products Others Export data over the years in the exports is as shown below. (in US $ Million). Commodity / Year I. Primary Products II. Manufactured Goods III. Petroleum Products IV. Others (All Commodities) Total Exports International Trade and Policy, MIB, DSE 1

2 Source: Table 129 : Exports of Principal Commodities - US Dollar, Handbook of Statistics on Indian Economy, 15 Sep 2010 Primary Products are further divided into two categories; Primary Products Agricultural and Allied Products Ores and Minerals The top items of agricultural exports are Rice, Oil Meals, Marine Products and Spices. Commodity / Year A. Agriculture and Allied Products B. Ores and Minerals ( US $ Million), Source: Table 129 : Exports of Principal Commodities - US Dollar, Handbook of Statistics on Indian Economy, 15 Sep 2010 International Trade and Policy, MIB, DSE 2

3 Manufactured goods are also divided further as follows: Manufactured Goods Leather and Manufactures Chemicals and Related Products Engineering Goods Textile and Textile Products Gems and Jewellery Handicrafts (excluding Handmade Carpets) Other Manufactured Goods Commodity / Year A. Leather and Manufactures B. Chemicals and Related Products C. Engineering Goods D. Textile and Textile Products E. Gems and Jewellery F. Handicrafts (excluding Handmade Carpets) G. Other Manufactured Goods ( US $ Million), Source: Table 129 : Exports of Principal Commodities - US Dollar, Handbook of Statistics on Indian Economy, 15 Sep 2010 International Trade and Policy, MIB, DSE 3

4 Petroleum Products consists of mineral fuels and lubricants. The export in petroleum products have increased over the period of time. Commodity / Year I. Primary Products 22.82% 15.99% 15.89% 13.67% II. Manufactured Goods 74.69% 77.05% 70.39% 66.46% III. Petroleum Products 1.43% 4.20% 11.29% 14.87% IV. Others (All 1.06% 2.76% 2.44% 5.00% Commodities) Different categories as percentage of total exports. Source: Table 129 : Exports of Principal Commodities - US Dollar, Handbook of Statistics on Indian Economy, 15 Sep 2010 International Trade and Policy, MIB, DSE 4

5 From the period till some of the Indian exports have move up the value addition chain whereby instead of exporting raw materials, the country has switched over to export of processed goods. Composition of India's Imports At the time of independence, our country was primarily agricultural economy. Industry was not so much developed. The partition of the country, however brought food shortage because our wheat growing areas remained with Pakistan. Therefore India had to import large quantities of food grains and other goods, for the same reason we had to import large quantity of raw cotton and raw jute. With the development of economy over the years, there was a marked change in the composition of imports. Economic development required setting up of new industries, modernisation of agriculture and industry. For this, capital goods like machinery, transport equipment, and raw materials, chemicals and fertilizers, petroleum products etc. are imported. Our major imports now comprise of capital goods, metals and minerals, chemicals and fertilizers, petroleum, oil and lubricants etc. which are required to meet the developmental needs of the country. International Trade and Policy, MIB, DSE 5

6 Import Composition Bulk Imports Non-Bulk Imports Petroleum, Crude and Products Bulk Consumption Goods Other Bulk Items Capital Goods Mainly Export Related Items Others Bulk Consumption Goods consists of cereals and cereal preparations, edible oils, pulses, and sugar. Other bulk items consists of fertilizers, non-ferrous materials, paper and paper boards, crude rubber, pulp and waste paper, metal scrap and Metalliferrous ores, Iron and Steel Capital goods comprises of manufacturers of metals, machine tools, machinery, electronic goods, computer goods, transport equipment, project goods. Mainly export related materials will comprise of pearls, precious and semi-precious stones, organic and in-organic chemicals, textile yarn, cashew nuts. Commodity / Year I. Bulk Imports 39.03% 41.19% 40.95% 45.70% II. Non-Bulk 60.97% 58.81% 59.05% 54.30% Imports Total Imports % % % % Comparison of Bulk and Non Bulk Imports as % of total Imports. Source: Table 129 : Exports of Principal Commodities - US Dollar, Handbook of Statistics on Indian Economy, 15 Sep 2010 International Trade and Policy, MIB, DSE 6

7 India's Trade with China S.No. \Year EXPORT 6, , , , , %Growth India's Total Export 103, , , , , %Growth %Share IMPORT 10, , , , , %Growth India's Total Import 149, , , , , %Growth %Share TOTAL TRADE 17, , , , , %Growth India's Total Trade 252, , , , , %Growth %Share TRADE BALANCE 17. India's Trade Balance -46, , , , , India & China signed a Trade Agreement in 1984 which provided for Most Favoured Nation Treatment and later in 1994, the two countries signed an agreement to avoid double taxation. The bilateral trade crossed US$13.6 billion in 2004 from US$ 4.8 billion in 2002, reaching $18.7 billion in The India China trade relations have been further developed from 2006, with the initiation of the border trade between Tibet, an autonomous region of China, and India through Nathu La Pass, reopened after more than 40 years. The leaders of both the countries have decided to enhance the bilateral trade to US$ 20 billion by 2008 and further to US$ 30 billion by According to the Indian Commerce Minister, Kamal Nath, China would soon become India's largest trade partner within the next 2-3 years, after the US and Singapore. International Trade and Policy, MIB, DSE 7

8 The principal items of Indian exports to China are ores, slag and ash, iron and steel, plastics, organic chemicals, and cotton. In order to increase the extent of exporting Indian goods to China, however, there should be a special emphasis on investments and trade in services and knowledge-based sectors. The other potential items of trade between India and China are marine products, oil seeds, salt, inorganic chemicals, plastic, rubber, optical and medical equipment, and dairy products. Great potential also exists in areas like biotechnology, IT and ITES, health, education, tourism, and financial sector. The main items that comprise Chinese exports to India are electrical machinery and equipment, cement, organic chemicals, nuclear reactors, boilers, machinery, silk, mineral fuels, and oils. Value added items like electrical machinery dominates Chinese exports to India. This exhibits that Chinese exports to India are fairly diversified and includes resource-based products, manufactured items, and low and medium technology products. It is said that if India is to capture the markets of China and enjoy profits, then it would have to discover new merchandise and branch out its exports to China India's Trade with US S.No. \Year EXPORT 17, , , , , %Growth India's Total Export 103, , , , , %Growth %Share IMPORT 9, , , , , %Growth India's Total Import 149, , , , , %Growth %Share TOTAL TRADE 26, , , , , %Growth India's Total Trade 252, , , , , %Growth %Share TRADE BALANCE 7, , , , India's Trade Balance -46, , , , , India US Trade Relations is the significant aspect of the global and strategic partnership existing between the two countries, United States and India. The India US Trade Relations over the years have grown to reach US $ billion in The premiers of both the nations believe that the cordial India US Trade Relations will have a long lasting and positive influence on the future international system, promoting stability, democracy, prosperity and peace across the world. The significant features of the India US Trade Relations are as follows: The Next Steps in Strategic Partnership provides a more transparent U.S. licensing International Trade and Policy, MIB, DSE 8

9 arrangements for Indian imports of sensitive items and technology. This in turn have lead to an enhancement in the high-tech trade between the two countries. The India US Trade Relations was further boosted with the conclusion of an Open Skies Agreement between the two nations in the year This agreement is supposed to increase the air connectivity between the two countries, thereby improving the commercial and trade relations. The visits of US Commerce Secretary Gutierrez and USTR Susan Schwab in this year has been a great impetus for the India US Trade Relations highlighting the multilateral issues including those on the Doha Round of Multilateral Trade Negotiations. The US-India Agricultural Alliance agreed upon on 2005, between the two countries concentrates on promoting teaching, research, service and commercial linkages. In the following year under the bilateral Knowledge Initiative on Agriculture there was an agreement to link universities, technical institutions and businesses to support agriculture education, joint research and capacity building projects specially in biotechnology. Outsourcing of knowledge work to India by the US based companies is a significant feature of the India US Trade Relations as producing goods and services in India makes them cheaper in the US. The India US Trade Relations is also characterized by the inter-dependence in terms of financial markets as US institutional investors are increasingly investing in India and on the other hand Indian multinational corporations are going on buying companies in the US and establishing operations in the US. Areas like infrastructure, IT, Telecom sector, energy and other knowledge industries such as pharmaceuticals and biotechnology, are the favourite areas for economic cooperation between India and the US. Some of the major multinational corporations of USA doing a profitable business in India are- General Electric, Whirlpool Ford (India), 3M, Tecumseh Products (India) Limited, Pepsi, Proctor and Gamble (India), Microsoft, Intel, and IBM Corporation. Export from India to US : The main export items from India to US are like precious gems and jewellery, textiles, organic chemicals and engineering goods, IT and agricultural products. In 2006, it is found that the total amount of Indian exports to the US increased by 16.07%. US Export to India : The main items of US exports to India. are machinery, precious stones and metals, organic chemicals, optical and medical instruments, aircraft and aviation machinery with the total amount increased by 26.31% in International Trade and Policy, MIB, DSE 9

10 Trends in Foreign Trade of India Source: Ministry of Commerce & Industry, Govt. of India; IndiaStat Database (2008). During the period of exports performance improved. Government had taken initiatives in late 1960s like establishing Indian Institute of Foreign Trade and others for promoting foreign trade. The world economy was also growing fast in 1970s. The export growth rate was 15.8 percent in 1970s before slowing down to 8 percent in 1980s.During 1970s, imports growth rate also picked up and in fact was higher than growth rate of exports. The contribution of foreign trade to GDP again reached to 11.8 per cent, the same level as on The export boom of the 1970s, however, could not be maintained during the first half of the 1980s. As the growth rate of world exports turned negative in the aftermath of the second oil price hike, India s exports decelerated sharply. During the second half of the 1980s, however, the world economy recovered and India s exports grew at a healthy pace (17.8 per cent). There was a genuine improvement in the export competitiveness of India during this period due to a major depreciation of the REER and increased International Trade and Policy, MIB, DSE 10

11 export subsidies. Source: Ministry of Commerce & Industry, Govt. of India; IndiaStat Database (2008). International Trade and Policy, MIB, DSE 11

12 Source: Ministry of Commerce & Industry, Govt. of India; IndiaStat Database (2008). Conclusion Indian foreign trade has progressed a lot over the last sixty years since Independence. The period can be divided into three sub-periods of , and post-1991.the trade has stagnated and India lost its market share to other countries in 1950s and 1960s.The government policies and dominant views of import substitution and export pessimism has a negative impact. The situation improved in 1970s and exports has finally picked up in post liberalization era in general and after 2002 in particular. In terms of composition, now it is dominated by manufactured goods and services. Services exports contribution has grown rapidly in recent past. India services exports share in global exports is more than double of that of Indian manufacturing exports In terms of direction, it is now more distributed around the world and the share of East Asian countries his on rise in overall trade. Looking at the large size of the economy, the high growth rates and small share in world trade; with the help of economic theories, we can safely conclude that there is huge untapped potential for Indian foreign trade in years to come. International Trade and Policy, MIB, DSE 12