Study of India's and U.S.A trade environment and imports and exports between 2 countries

1. 1
Index
Chapter Number Title Page Number
1 International Trade 3-5
2 Need For International Trade 6
3 India’s Demographics 7-10
4 India’s Trade Environment 11-12
5 India’s Participation In World Trade 13-14
6 India’s Foreign Trade 15-16
7 Major Exporters And Importers Of India 17-20
8 Major Exports And Imports Of India 21
9 U.S.A Trade Environment 22
10 India’s Imports And Exports With U.S.A 23-25
11 Trade Barriers To U.S.A Form India 26
Conclusion 28
Webliography 29

2. 2
Index of Tables
Table Number Title Page Number
Table 3.1: India’s demographics 7
Table 7.1 Top ten exporters to India, by value of trade in US$m 18
Table 7.2 Top ten importers from India, by value of trade in US$m 19
Index of Figures
Figure Number Title Page Number
Figure 5.1 India’s Imports and Exports 13
Figure 7.1 India’s Export Destinations 18
Figure 7.2 India’s Import Destinations 19
Figure 8.1 Major exports of India 20
Figure 8.2 Major Imports of India 20
Figure 10.1 India’s Exports to U.S.A 23
Figure10.2 India’s Imports from U.S.A 24

3. 3
Chapter 1: International trade
International trade is the exchange of capital, goods, and services across international borders or
territories. In most countries, such trade represents a significant share of gross domestic
product (GDP). While international trade has been present throughout much of history its
economic, social, and political importance has been on the rise in recent centuries. It is the
presupposition of international trade that a sufficient level of geopolitical peace and stability are
prevailing in order to allow for the peaceful exchange of trade and commerce to take place
between nations.
Industrialization, advanced in technology transportation, globalization, multinational
corporations, and outsourcing are all having a major impact on the international trade system.
Increasing international trade is crucial to the continuance of globalization. Without international
trade, nations would be limited to the goods and services produced within their own borders.
International trade is, in principle, not different from domestic trade as the motivation and the
behavior of parties involved in a trade do not change fundamentally regardless of whether trade
is across a border or not. The main difference is that international trade is typically more costly
than domestic trade. The reason is that a border typically imposes additional costs such as tariffs,
time costs due to border delays and costs associated with country differences such as language,
the legal system or culture.
Another difference between domestic and international trade is that factors of production such as
capital and labor are typically more mobile within a country than across countries. Thus
international trade is mostly restricted to trade in goods and services, and only to a lesser extent
to trade in capital, labor or other factors of production. Trade in goods and services can serve as a
substitute for trade in factors of production. Instead of importing a factor of production, a
country can import goods that make intensive use of that factor of production and thus embody
it. An example is the import of labor-intensive goods by the United States from China. Instead of
importing Chinese labor, the United States imports goods that were produced with Chinese labor.
One report in 2010 suggested that international trade was increased when a country hosted a
network of immigrants, but the trade effect was weakened when the immigrants became
assimilated into their new country.

4. International trade is also a branch of economics, which, together with international finance,
forms the larger branch called international economics. Trading is a value-added function: it is
the economic process by which a product finds its market, in which specific risks are to be borne
by the trader.
4
History of International trade
Any time you walk into a super market and pick up any stuff like a knife or a toy and chances
are that the item has been manufactured in China or assembled in Mexico. Pick up coffee pods
and you will see that they have been imported from Africa. When you shop for clothes, it is
quite likely that you will see ‘Made In China’ label.
We all know that international trade been in vogue for centuries and all civilizations carried
on trade with other parts of the world. The need for trading exists due to the variations in
availability of resources and comparative advantage. In the present context where technology
and innovation in all fields have thrown open borders to globalization, no country can afford to
remain isolated and be self-sufficient.
International trade has a rich history starting with barter system being replaced by Mercantilism
in the 16th and 17th Centuries. The 18th Century saw the shift towards liberalism. It was in this
period that Adam Smith, the father of Economics wrote the famous book ‘The Wealth of
Nations’ in 1776 where in he defined the importance of specialization in production and brought
International trade under the said scope. David Ricardo developed the Comparative advantage
principle, which stands true even today.
All these economic thoughts and principles have influenced the international trade policies of
each country. Though in the last few centuries, countries have entered into several pacts to move
towards free trade where the countries do not impose tariffs in terms of import duties and allow
trading of goods and services to go on freely.
The 19th century beginning saw the move towards professionalism, which petered down by end
of the century. Around 1913, the countries in the west say extensive move towards economic
liberty where in quantitative restrictions were done away with and customs duties were reduced
across countries. All currencies were freely convertible into Gold, which was the international

5. 5
monetary currency of exchange. Establishing business anywhere and finding employment was
easy and one can say that trade was really free between countries around this period.
The First World War changed the entire course of the world trade and countries built walls
around themselves with wartime controls. Post world war, as many as five years went into
dismantling of the wartime measures and getting back trade to normalcy. But then the economic
recession in 1920 changed the balance of world trade again and many countries saw change of
fortunes due to fluctuation of their currencies and depreciation creating economic pressures on
various Governments to adopt protective mechanisms by adopting to raise customs duties and
tariffs.
The need to reduce the pressures of economic conditions and ease international trade between
countries gave rise to the World Economic Conference in May 1927 organized by League of
Nations where in the most important industrial countries participated and led to drawing up of
Multilateral Trade Agreement. This was later followed with General Agreement of Tariffs and
Trade (GATT) in 1947.
However once again depression struck in 1930s disrupting the economies in all countries leading
to rise in import duties to be able to maintain favorable balance of payments and import quotas
or quantity restrictions including import prohibitions and licensing.
Slowly the countries began to grow familiar to the fact that the old school of thoughts were no
longer going to be practical and that they had to keep reviewing their international trade policies
on continuous basis and this interns lead to all countries agreeing to be guided by the
international organizations and trade agreements in terms of international trade.
Today the understanding of international trade and the factors influencing global trade is much
better understood. The context of global markets have been guided by the understanding and
theories developed by economists based on Natural resources available with various countries
which give them the comparative advantage, Economies of Scale of large scale production,
technology in terms of e commerce as well as product life cycle changes in tune with
advancement of technology as well as the financial market structures.

6. 6
Chapter 2: Need for international trade
International trade is needed so that all countries can avail themselves of the things that they
need (and want), and that are not available in their own country. The most common example is
oil, which is needed throughout the world, but it is limited to particular areas, and so
is traded internationally.
International trade accounts for a huge part of a country's gross domestic product (GDP) and is a
vital source of revenue for all countries, particularly those that are developing, though it is the
nations that have the strongest international trade, and who have prospered by it, that have
become the driving force behind world economy.
It is usually accepted that the benefits of international trade, and therefore, the reasons why it is
needed are: It enhances domestic competiveness; it increases sales and profits; it takes advantage
of international trade technology; it extends the sales potential of existing products; it maintains
cost competiveness in the domestic market; it increases the potential for business expansion; it
achieves a global market share; it reduces the dependency on markets that already exist; and it
stabilizes seasonal market fluctuations.
International trade is no new phenomena; the Silk Route is a very famous trading route that was
used to transport silk and spices in the 14th and 15th centuries. The 18th century saw Clippers,
which were ships designed for speed, being used to transport all manner of things from tea from
China, and spices from the Dutch East Indies. Sugar, cotton and other goods were also traded
internationally to the delight of both those producing them, and those receiving them, but the
most sinister trading happened in a much darker period of history: Slaves also became
a commodity to be traded internationally; the very negative repercussions of which can still be
seen today.

7. 7
Chapter 3 :India’s Demographics
Table 3.1: India’s demographics
Population 1,236,344,631 (July 2014 est.)
Age structure 0-14 years: 28.5% (male 187,016,401/female 165,048,695)
15-24 years: 18.1% (male 118,696,540/female 105,342,764)
25-54 years: 40.6% (male 258,202,535/female 243,293,143)
55-64 years: 7% (male 43,625,668/female 43,175,111)
65 years and over: 5.8% (male 34,133,175/female 37,810,599) (2014
est.)
Dependency ratios Total dependency ratio: 51.8 %
youth dependency ratio: 43.6 %
elderly dependency ratio: 8.1 %
potential support ratio: 12.3 (2014 est.)
Median age Total: 27 years
male: 26.4 years
female: 27.7 years (2014 est.)
Population growth
rate
1.25% (2014 est.)
Birth rate 19.89 births/1,000 population (2014 est.)
Death rate 7.35 deaths/1,000 population (2014 est.)
Net migration rate -0.05 migrant(s)/1,000 population (2014 est.)
Urbanization urban population: 31.3% of total population (2011)
rate of urbanization: 2.47% annual rate of change (2010-15 est.)
Major cities -
population
NEW DELHI (capital) 22.654 million; Mumbai 19.744 million; Kolkata
14.402 million; Chennai 8.784 million; Bangalore 8.614 million;
Hyderabad 7.837 million (2011)
Sex ratio at birth: 1.12 male(s)/female
0-14 years: 1.13 male(s)/female
15-24 years: 1.13 male(s)/female
25-54 years: 1.06 male(s)/female

8. 8
55-64 years: 1.08 male(s)/female
65 years and over: 0.91 male(s)/female
total population: 1.08 male(s)/female (2014 est.)
Mother's mean age at
first birth
19.9 (2005-06 est.)
Infant mortality rate Total: 43.19 deaths/1,000 live births
male: 41.9 deaths/1,000 live births
female: 44.63 deaths/1,000 live births (2014 est.)
Life expectancy at
birth
Total population: 67.8 years
male: 66.68 years
female: 69.06 years (2014 est.)
Total fertility rate 2.51 children born/woman (2014 est.)
Contraceptive
54.8% (2007/08)
prevalence rate
HIV/AIDS - adult
prevalence rate
0.3% (2012 est.)
HIV/AIDS -
people LIVING
WITH HIV/AIDS
2.085 million (2012 est.)
HIV/AIDS - deaths 135,500 (2012 est.)
Drinking water
source
improved:
urban: 96.7% of population
rural: 90.7% of population
total: 92.6% of population
unimproved:
urban: 3.3% of population
rural: 9.3% of population
total: 7.4% of population (2012 est.)
Sanitation facility
access
improved:
urban: 60.2% of population

9. 9
rural: 24.7% of population
total: 36% of population
unimproved:
urban: 39.8% of population
rural: 75.3% of population
total: 64% of population (2012 est.)
Major infectious
diseases
degree of risk: very high
food or waterborne diseases: bacterial diarrhea, hepatitis A and E, and
typhoid fever
vector borne diseases: dengue fever, Japanese encephalitis, and malaria
water contact disease: leptospirosis
animal contact disease: rabies
note: highly pathogenic H5N1 avian influenza has been identified in this
country; it poses a negligible risk with extremely rare cases possible
among US citizens who have close contact with birds (2013)
Nationality noun: Indian(s)
adjective: Indian
Ethnic groups Indo-Aryan 72%, Dravidian 25%, Mongoloid and other 3% (2000)
Religions Hindu 80.5%, Muslim 13.4%, Christian 2.3%, Sikh 1.9%, other 1.8%,
unspecified 0.1% (2001 census)
Languages Hindi 41%, Bengali 8.1%, Telugu 7.2%, Marathi 7%, Tamil 5.9%, Urdu
5%, Gujarati 4.5%, Kannada 3.7%, Malayalam 3.2%, Oriya 3.2%,
Punjabi 2.8%, Assamese 1.3%, Maithili 1.2%, other 5.9%
note: English enjoys the status of subsidiary official language but is the
most important language for national, political, and commercial
communication; Hindi is the most widely spoken language and primary
tongue of 41% of the people; there are 14 other official languages:
Bengali, Telugu, Marathi, Tamil, Urdu, Gujarati, Malayalam, Kannada,
Oriya, Punjabi, Assamese, Kashmiri, Sindhi, and Sanskrit; Hindustani is
a popular variant of Hindi/Urdu spoken widely throughout northern

10. 10
India but is not an official language (2001 census)
Literacy definition: age 15 and over can read and write
total population: 62.8%
male: 75.2%
female: 50.8% (2006 est.)
SCHOOL life
expectancy (primary
to tertiary education)
total: 12 years
male: 12 years
female: 11 years (2011)
Child labor - children
ages 5-14
total number: 26,965,074
percentage: 12 % (2006 est.)
Education
expenditures
3.2% of GDP (2011)
Maternal mortality
rate
200 deaths/100,000 live births (2010)
Children under the
age of 5 years
underweight
43.5% (2006)
Health expenditures 3.9% of GDP (2011)
PHYSICIANS
density
0.65 PHYSICIANS/1,000 population (2009)
HOSPITAL BED
density
0.9 beds/1,000 population (2005)
Obesity - adult
prevalence rate
1.9% (2008)
Source: www.indexmundi.com

11. 11
Chapter 4: India trade environment
With the ever increasing globalisation, both the internal and external sectors display
substantial linkages and play a vital role in promoting economic development. Macroeconomic
stability in the domestic sector provide boost to external sector performance. Similarly
achievements in external sector facilitate growth in domestic sector. Hence both are
interrelated and effective management of external sector in terms of augmenting inflow of
resources while containing exogenous shocks becomes a cardinal principle of economic
governance. In totality, foreign trade can have a profound impact on the growth of an economy
in terms of production, employment, technology, resource utilisation and so on. Foreign trade
plays a very important role in India’s economic development since the commencement of
planning.
Foreign trade helps to produce those commodities which have a comparative cheaper cost
than others. It results in less cost of production in producing a commodity. If all the countries
adopt this procedure to produce these goods in. which they have less comparative cost, it will
lead to availability of goods at a lower price. Foreign trade also increases the scope of market
because of domestic demand and foreign demand for the product. So there is mass production. If
the production of goods increases, average cost declines and price of goods declines. It helps
the people to get different varieties of goods both in quantities terms and qualitative
terms. Foreign trade helps a developing country like India in its economic development. Iron and
steel industry, has been established due to stored iron-ore and coal. But for the
establishment of this type industry, we have to import technical knowledge from foreign
countries. Had there been no foreign trade, then it would not have been only difficult but also too
expensive. Without foreign trade, it is not possible to fulfill the demand for petroleum products
and it will retard the economic development of our country. There is also scarcity of consumer
goods due to natural calamities or due to any other reason. During the time scarcity of consumer
goods, we import these goods from foreign countries and keep prices stable which help people to
get their commodities.
India’s international trade policy following her independence in 1947 focused on being
self sufficient, which also implied minimal reliance on international trade as a source of income.
An alarming large number of people were living in abject poverty and the central government

12. sought to improve the well -being of people by adopting the strategy of ‘import-substituting’
industrialization. To implement this, the government developed a complex, extensive and
often costly system of price controls and quantitative restrictions
The most significant determinants of economic development in a country are its Foreign Trade.
The foreign trade of a country consists of inward and outward movement of goods and services,
which result into outflow and inflow of foreign exchange from one country to another country.
During present times, International trade is a vital part of development strategy and it can be an
effective instrument of economic growth, employment generation and poverty alleviation in
an economy. According to Traditional Pattern of development resources are transferred from
the agricultural to the manufacturing sector and then into services - sector in an economy.
Foreign trade also facilitates the dissemination of technical knowledge, transmission of ideas,
and import of know -how/skills, managerial talents and entrepreneurship. In addition, foreign
trade encourages movement of foreign capital. In totality, foreign trade can have a profound
impact on the growth of an economy in terms of production, employment, technology,
resource utilization and so on. Foreign trade plays a very important role in India’s economic
development since the commencement of planning. During these period lots of changes were
carried out in the composition and direction of foreign trade. The present paper deals with
the trends and pattern of India’s foreign trade. The paper also tries to analyze the
direction and composition of India’s international trade.
12

13. 13
Chapter 5: India’s Participation In World Trade
Figure 5.1: India’s Imports and Exports
Source: www.theguardian.com
There are so many countries in the world. They are in different size and shape. There
are large countries with large population and small countries with small population. But there
are certain features which are common in them they all are depend upon each other’s for their
economic activities. The size of foreign trade and its volume both have increased during pre and
post reform period. However, this increase in foreign trade is not satisfactory as India’s share in
total foreign trade of the world has rem ained low. India’s share in the total world trade was 1.78
per cent in 1950; it came down to 0.6 percent in 1995. Since 1970, this share has remained

14. around 0.6%, which clearly indicates that India has failed to increase its share in the total world
trade.
India’s share in global exports and imports were also declined since independence. Its share in
export was 1.78 percent in 1950 which came down to 0.7 per cent in 2000. Their shares in import
were 1.71 per cent in 1950 rising fast since 2004, reached 1.3 per cent in 2009 and 1.5 per cent
in 2010. It increased to 1.66 per cent in the 2011, mainly due to the relatively higher Indian
export growth of 55 per cent compar ed to the 23.1 per cent export growth of the world. Also,
India’s share in global imports increased from 0.8 per cent in 2000 to 2.2 per cent in 2010. Its
ranking in the leading exporters improved from 31 in 2000 to 20 in 2010 and in leading
importers from 26 to 13 during same period
14

15. 15
Chapter 6: India’s Foreign Trade
India's foreign trade continuously increased. It has show the position of export and Import of
Indian economy. The size or magnitude of India’s foreign trade in rupee terms (export and
import) has been rising considerably since 1950-51. For the period of 1950-51 to 1960-61,
India’s total value of foreign trade in terms of rupee rose by 45.3 percent. It rose by 69.7 percent
during 1960 -61 to 1970-71, by 391.0 percent during 1970-71 to 1980-81.
Over the period of six decades India’s export increased by several times. During the first
and the second five year plans exports remained almost stagnant around Rs. 600 crores on
average. An upward trend was observed during Third Plan as a result of the adoption of various
export promotion measures. The export received a further boost after the devaluation of June
1966. The annual average growth rate of export for the period of 1960-70 was a meagre 3.6
percent. The export increased significantly in 1970s. The sixth plan achieved an annual
growth rate of 13.0 percent and the Seventh plan 19.8 percent. During the Eight Plan
export grew by 26.8 percent. As a result of the introduction of New Economic Policy in 1991,
the percentage growth rate of export was 35.3 in 1991-92, 28.6 percent in 1995-96, 27.6
in 2000-01, and 26.1 percent in 2005-06 and again rises to 35.1 percent in 2010-11.
As against the modest growth in exports, imports have been increasing at higher rate. Imports
play a critical role in Indian economy. In 1950-51 total merchandise imports were valued
at Rs.608 crores which increase to Rs. 1122 crores in 1960-61, 1634 in 1970-71, further
Rs.12549 crores in 1980-81 and Rs. 43198 crores in 1990-91. in post reform period it has
increased from Rs. 47851 crores 1991 -92 to Rs.230872 crores in 2000-01 and further to Rs.
1683467 crores in 2010-11.
The volume of trade balance of India has remained always negative (i.e. Due to the
volume of imports exceeds the volume of exports) expect for only two years trade balance of
India has remained positive i.e. is in the year 1972-73 and 1976-77. The volume of trade balance
was Rs -2 crores in 1950-51, and it was increased up to Rs.-169 crores in 1969-70, however
there is a continuously increase in the negative volume of trade balance in pre-reform period it
was Rs.-7670 crores in1989-90, and in post reform period it has increased up toRs.-27301 crores

16. in 2000-01 and in the year 2010-11 further to Rs.-540545 crores. This had adversely affected the
balance of payments and foreign exchange position of the country.
16

17. 17
Chapter 7: Major Exporter and Importer of India
The directional pattern of India’s trade has been changing constantly. There has been
significant change in market area of India's trade. Region-wise, while India's exports to
Europe and America have declined, its exports to Asia and Africa have increased. Share of
major destinations of India’s Exports and sources of Imports during 2012-13 (April– January)
are given in table 5 & table 6 respectively. During the period 2012-13 (April–January), the
share of Asia comprising of East Asia, ASEAN, West Asia, Other West Asia, North East
Asia and South Asia accounted for 50.78 per cent of India’s total exports in US $ terms. The
share of Europe and America in India’s exports stood at 18.88 per cent and 18.77 per cent
respectively of which EU During the countries (27) comprises 16.99 per cent. During the period,
USA (12.89 per cent) has been the most important country of export destination followed by
UAE (12.20 per cent), Singapore (4.79 percent), China (4.59 per cent) and Hong Kong (3.95 per
cent).Asia accounted for 60.08 per cent of India’s total imports during the period
followed by Europe (17.39 per cent) and America (11.64 per cent). Among individual countries
the share of China stood highest at (11.21 per cent) followed by UAE (7.67 per cent), Saudi
Arabia (6.78 per cent), Switzerland (6.01 per cent) and USA (5.00 per cent).

18. 18
Figure 7.1: India’s Export Destinations
Source : atlas.media.mit.edu
Table 7 .1 :Top ten exporters to India, by value of trade in US$m
Country
▾
2012-2013 (Apr-
Sep)
%Share (2012-2013
(Apr- Sep)
USA 12208.05 5.19
UAE 19622.81 8.35
Switzerland 10779.45 4.59
Saudi
16094.83 6.85
Arabia
Qatar 8144.45 3.47
Kuwait 8134.73 3.46
Iraq 9803.79 4.17
Indonesia 6944.86 2.95
Germany 7154.41 3.04
China 28025.57 11.92
Source: http://www.theguardian.com/

19. 19
Figure 7.2: India’s Import Destinations
Source : atlas.media.mit.edu
Table 7.2: Top ten importers from India, by value of trade in US$m
Country 2012-2013 (Apr-
Sep)
%Share (2012-2013
(Apr- Sep)
USA 19704.05 13.87
UAE 18601.71 13.09
Singapore 6652.77 4.68
China 6417.32 4.52
Hong Kong 6137.9 4.32
Saudi Arab 4636.29 3.26
Netherlands 4458.24 3.14
U K 4112.26 2.89
Germany 3491.77 2.46
Brazil 3042.64 2.14
Source: http://www.theguardian.com

20. 20
Chapter 8 : Major Exports and Imports of India
Major exports of India
India's export basket has been changing over the years. While the share of primary products in
India's exports fell over the years from 16 per cent in 2000-01, in 2012-13 (April-November) it
regained the share of 16 per cent mainly due to the export of agricultural items like rice
and guar gum meal. The share of manufacturing exports fell drastically from 78.8 per cent in
2000-01 to 66.1 per cent in 2011-12 and further to 64.5 per cent in 2012-13(April-November)
mainly due to the fall in shares of traditional items like textiles and leather and leather
manufactures even though the share of engineering goods and chemicals and related
products increased. Share of gems and jewellery fell marginally. Share of petroleum,
crude & products exports, which also include refined items, increased from 4.3 per cent in
2000-1 to 18.3 per cent in 2011-12 and 18.6 per cent in 2012-13(April-November).
The share of top five Principal Commodity Groups in India’s total exports during 2012-13 (April
January) are Petroleum (20.2%), Gems & Jewellery (14.4%), Transport Equipment’s (6.1%),
Machinery and Instruments (5.1%) and Drugs, Pharmaceuticals & Fine Chemicals (5%).
Figure 8.1 Major exports of India
Source : atlas.media.mit.edu

21. 21
Major Imports of India
In case of imports, there are no major compositional changes other than the sudden rise in share
of gold and silver imports from 9.3 per cent in 2000-01 to 12.6 per cent in2011-12 with a high
import growth rate of 44.5 per cent. The share of pearls, precious, and semiprecious stones
decreased from 9.6 per cent in 2000-01 to 6.1 per cent in the 2011-12 following a negative
growth of -13.3 per cent and further to 4.1 per cent in 2012-13 (April- November), with a
high negative growth rate of - 32.3 per cent. Another important development is related to
the share of capital goods imports which increased from 10.5 per cent in 2000 -1 to 13.6 per cent
in 2010- 11 and further to 14.1 per cent in 2011-12, declining thereafter to 11.9 per cent in 2012-
13 (April-November) following a negative growth rate of - 6.5 per cent.
Imports of the top five commodities during the period 2012 -13 (April-January) registered a
share of 61.8 per cent mainly due to significant imports of Petroleum (Crude & Products), Gold,
Electronic Go ods, Machinery except electrical and electronic and Pearls, precious and semi-precious
stones. The share of top five Principal Commodity in India’s total imports during 2012-
13 (April– January)
Figure 8.2: Major Imports of India
Source : atlas.media.mit.edu

22. 22
Chapter 9: U.S.A trade environment
The United States is the world's largest country exporter of goods and services. In 2008, U.S.
exports totaled $1.84 trillion and accounted for 13 percent of gross national product. The U.S.
imported $2.5 trillion in goods and services in 2008, with that figure reflecting in part high
volumes and prices of imported petroleum.
The products traded by the United States and the trade related codes of conduct incorporated into
trade agreements cover a wide swath of the U.S. economy, touching in one way or another on
most Americans. Over one trillion dollars of U.S. goods exports are manufactured products, by
far the largest segment of U.S. goods and services exports. Approximately one quarter of these
exports are classified as advanced technology products. Agricultural products are also a part of
goods trade and totaled $118 billion in 2008. Petroleum, likewise part of goods trade, plays a
relatively modest role in U.S. exports ($67 billion), while looming large in U.S. imports ($453
billion).
As in goods, the United States is also a competitive exporter of services, with U.S. cross-border
export of services valued at $544 billion, greater than U.S. imports ($405 billion) of services.
While the United States receives substantial earnings from the export of travel, passenger fares
and other transportation services, and royalties and other license fees, the largest U.S. services
export category is other private services, accounting for nearly half of U.S. private service
exports in 2008.
Among the more prominent commitments and trade-related codes of conduct are undertakings in
the areas of trade and labor, trade and the environment, trade and intellectual property rights
(TRIPS), and trade and investment (TRIMS).
Trade and U.S. trade agreements thus affect Americans in our many guises, as consumers, as
workers - both unionized and non-unionized, as families, and as manufacturers, farmers, ranchers
and services providers of everything from education, to insurance, to industrial engineering, to
telecommunications, to computer and information to film and television programming, and to
medical services.

23. 23
Chapter 10: India’s Imports and Exports with U.S.A
India’s Exports to U.S.A
Figure 10.1: India’s Exports to U.S.A
Source : atlas.media.mit.edu
1) Packaged medicaments
2) Valves
3) Refined petroleum
4) House linens
5) Iron pipe fittings
6) Rubber tires
7) Crustaceans
8) Vegetable saps
9) Jewellery
10) Vehicle parts

24. 24
11) Mattresses
12) Prcessed fruits and nuts
13) Bathroom ceramics
14) Trunks and cases
15) Leather footwear
16) Stearic acid
17) Utility meterswood articles
18) Parper notebooks
19) Thermostats
20) Cellulose fiber paper
India’s Imports from U.S.A
Figure 10.2: India’s Imports from U.S.A
Source : atlas.media.mit.edu
1) Gold
2) Coal briquettes
3) Scrap iron

25. 25
4) Measuring instruments
5) Vehicle and aircraft parts
6) Recovered pare
7) Other nuts
8) Clothing
9) Sawn wood
10) Hides
11) Paintings
12) Eggs
13) Military weapons
14) Chemical products
15) Edible prepaprations
16) Nuts and fruits

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Chapter 11: Trade barriers to U.S.A from India
Despite India's ongoing economic reform efforts,US exporters continue to encounter tariff and
non-tariff barriers that impede imports of Americans products to India, an official report has said.
In its report 2012 National Trade Estimate Report on Foreign Trade Barriers, the US trade
Representatives (USTR) yesterday said the US has actively sought bilateral and multilateral
opportunities to open India's market.
The structure of India's customs tariff and fees system is complex and characterised by a lack of
transparency in determining net effective rates of customs tariff, excise duty and other duties and
charges on imports into India," said the India section of the report.
US goods trade deficit with India was $ 14.5 billion in 2011, up $ 4.3 billion from 2010, it said.
US goods exports in 2011 were $ 21.6 billion, up 12.4 per cent from the previous year.
Corresponding US imports from India were $ 36.2 billion, up 22.5 per cent.
Noting that India is currently the 17th largest export market for US goods, the report said US
exports of private commercial services (excluding military and government) to India were $ 10.3
billion in 2010 (latest data available), and US imports were $ 13.7 billion.
Sales of services in India by majority US-owned affiliates were $ 13.1 billion in 2009 (latest data
available), while sales of services in the US by majority India-owned firms were $ 7.2 billion.
The stock of US foreign direct investment (FDI) in India was $ 27.1 billion in 2010, up from $
20.9 billion in 2009, it said adding, that US FDI in India is led by the information, professional,
scientific, and technical services, and manufacturing sectors.
In its report, USTR said India' procurement practices and procedures are often not transparent.
Foreign firms also rarely win Indian government contracts due to the preference afforded to
Indian state-owned enterprises and the prevalence of such enterprises.
USTR said India's tax exemption for profits from export earnings has been completely phased
out, but tax holidays continue for certain export-oriented enterprises and exporters in Special
Economic Zones.

27. "In addition to these programmes, India continues to maintain several other export subsidy
programmes, including duty drawback programmes that appear to allow for drawback in excess
of duties levied on imported inputs," it said, adding that India also provides pre-shipment and
post-shipment financing to exporters at a preferential rate.
27

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Conclusion
The pre-reform period did not see much of structural changes in the foreign trade particularly,
the export sector. However, there have been some significant changes in Import,
specifically high imports of petroleum products and machinery and equipment. In the
post-reform period India’s trade has increased significantly because of LPG. India’s trade
balance is always negative because of volume of imports are greater than exports, so the
government should frame such policy which boost the volume of exports, ultimately it
helps to transform negative trade balance into positive trade balance. The volume of imports was
always remained high, so it is necessary to curtail the imports of un necessary goods and
luxurious goods, which in turn help to maintain positive trade balance. The Government
of India must frame such policies which induces the promotions of exports from all the
sectors of the economy. To bring the country’s export back on the growth path the Government
announced trade policy for 2009-14 in August 2009. It has set the target of export growth at 15
percent for the first two years and at 25 percent per annum in the last three years. It has been
targeted to achieve an export figure of $200billion in 2010 -11 as against $168 billion in2008-
09. By 2014, it is expected to double India’s export of goods and services. India’s share
in global trade and services is 1.64 percent at present. Aim of the policy is to raise this share to
3.28 percent by 2020.

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Webliography
 http://atlas.media.mit.edu/
 http://www.theguardian.com/
 http://www.indexmundi.com/india/demographics_profile.html
 http://en.wikipedia.org/wiki/International_trade