Trends in India's Foreign Trade


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Trends in India's Foreign Trade

  1. 1. Chapter-2 Trends in India’s Foreign TradeIndia’s Trade Performance and the 13th largest importer with a share of 2.1 per cent in 2010.India’s merchandise exports reached a level of US $251.14 billion during 2010-11 registering a growth The year 2011 has been a difficult year with Japanof 40.49 percent as compared to a negative growth facing a major earthquake and tsunami, the swellingof 3.53 percent during the previous year. India’s of unrest in the Middle East oil producing countries,export sector has exhibited remarkable resilience the slowing down of US economy and the Euroand dynamism in the recent years. Despite the area facing major financial turbulence. The currentrecent setback faced by India’s export sector due to global economic slowdown has its epicenter in theglobal slowdown, merchandise exports recorded a Euro-region but the contagion is being witnessedCompound Annual Growth Rate (CAGR) of 20.0 per in all major economies of the world. As a result,cent from 2004-05 to 2010-11. India’s short-term growth prospects have also beenWorld Trade Scenario impacted. ExportsAs per IMF’s World Economic Outlook October,2011, world trade recorded its largest ever annual Exports recorded a growth of 40.49 per cent duringincrease in 2010, as merchandise exports surged April-March 2010-11. The Government has set an14.4 per cent. The volume of world trade (goods export target of US $ 300 billion for 2011-12. Withand services) in 2011 is expected to slow down merchandise exports reaching US $ 217.66 billionto 7.5 per cent compared to the 12.8 per cent in 2011-12(Apr-Dec), the export target of 300 USachieved in 2010. Growth in the volume of world $ billion is expected to be achieved. Export targettrade is expected to decline in 2012 to 5.8 per cent and achievement from 2004-05 to 2010-11 andas per IMF projections. 2011-12 (Apr-Dec) is given in the Chart 2.1 below:The IMF has moderated its growth projections of Importsworld output to 4 per cent in 2012. The advanced Cumulative value of imports during 2011-12 (Apr-economies are expected to grow at 1.9 per cent Dec) was US $ 350.94 billion as against US $ 269.18in 2012 while the emerging and developing billion during the corresponding period of theeconomies to grow at 6.1 per cent. The projected previous year registering a growth of 30.4 per centgrowth rates in different countries are expected to in $ terms. Oil imports were valued at US $ 105.6determine the markets for our exports. billion during 2011-12 (Apr-Dec) which was 40.39As per WTO’s International Trade Statistics, 2010, per cent higher than oil imports valued US $ 75.2in merchandise trade, India is the 20th largest billion in the corresponding period of previousexporter in the world with a share of 1.4 per cent year. Non-oil imports were valued at US $ 245.35 18
  2. 2. CHAPTER-2 Trends in India’s Foreign Trade Chart 2.1 Export Target & Achievementbillion during 2011-12 (Apr-Dec) which was 26.49 than the deficit of US $ 96.21 billion during 2010-per cent higher than non-oil imports of US $ 194.0 11 (Apr-Dec). Performance of Exports, Imports andbillion in previous year. Balance of Trade during 2004-05 to 2011-12 (April-Trade Balance Dec) is given in the table below:The Trade deficit in 2011-12 (Apr-Dec) wasestimated at US $ 133.27 billion which was higher (Values in ` Crores) S.No Year Exports %Growth Imports %Growth Trade Balance 1 2004-2005 3,75,340 27.94 5,01,065 39.53 -1,25,725 2 2005-2006 4,56,418 21.6 6,60,409 31.8 -2,03,991 3 2006-2007 5,71,779 25.28 8,40,506 27.27 -2,68,727 4 2007-2008 6,55,864 14.71 10,12,312 20.44 -3,56,448 5 2008-2009 8,40,755 28.19 13,74,436 35.77 -5,33,680 6 2009-2010 8,45,534 0.57 13,63,736 -0.78 -5,18,202 7 2010-2011 11,42,649 35.14 16,83,467 23.45 -5,40,818 (Provisional) 8 2010-11 (Apr-Dec) 7,89,069 12,28,074 -4,39,006 9 2011-12 (Apr-Dec) 10,24,707 29.86 16,51,240 34.46 -6,26,533 Data Source: DGCIS, Kolkata (Values in US $ Millions)S.No Year Exports %Growth Imports %Growth Trade Balance1 2004-2005 83,536 30.85 1,11,517 42.7 -27,9812 2005-2006 1,03,091 23.41 1,49,166 33.76 -46,0753 2006-2007 1,26,414 22.62 1,85,735 24.52 -59,3214 2007-2008 1,63,132 29.05 2,51,654 35.49 -88,522 19
  3. 3. Annual Report 2011-125 2008-2009 1,85,295 13.59 3,03,696 20.68 -1,18,4016 2009-2010 1,78,751 -3.53 2,88,373 -5.05 -1,09,6217 2010-2011 2,51,136 40.49 3,69,769 28.23 -1,18,633 (Provisional)8 2010-11 (Apr-Dec) 1,72,965 2,69,175 -96,2109 2011-12 (Apr-Dec) 2,17,664 25.84 3,50,936 30.4 -1,33,272Data Source:DGCIS, Kolkata Chart 2.2 Month-wise Growth during 2011-12 (April-Dec) over 2010-11 (April-Dec)Strategy for Doubling Exports deficit and uncertain global economic scenario, Department of Commerce, in May 2011 finalizedGlobal economic outlook is a major determinant of a Strategy Paper for doubling merchandiseexport performance of any country. Export growth exports in three years from US $ 246.00 billion incannot, therefore, be viewed in isolation from 2010-11 to US $ 500 billion in 2013-14. Exportseconomic outlook in the world economy. Keeping were envisaged to increase at compounded averagein view the urgency of managing the growing trade growth of 26.7% per annum. The Union Minister for Commerce, Industry & Textiles, Shri Anand Sharma interacting with media regarding Strategy Paper for doubling merchandise exports, in New Delhi on May 03, 2011 20
  4. 4. CHAPTER-2 Trends in India’s Foreign TradeExports by Principal Commodities registered a share of 53.1 per cent mainly due to significant contribution in the exports of PetroleumDisaggregated data on exports by Principal (Crude & Products), Gems & Jewellery, TransportCommodities, both in Rupee and Dollar terms, Equipments, Machinery and Instruments, Drugs,available for the period 2011-12 (April-October) Pharmaceuticals & Fine compared with the corresponding period ofthe previous year are given in Table 2.1, and 2.2 The share of top five Principal Commodity Groupsrespectively. Exports of the top five commodities in India’s total exports during 2011-12 (April-during the period 2011-12 (April-October) October) is given at Chart 2.3 below: Chart 2.3 Share of Top Principal Commodities in India’s Export 2011-12 (April-OctoberThe export performance (in terms of growth) of top vis-a-vis the corresponding period of the previousfive commodities during 2011-12 (April-October) year is shown at Chart 2.4. Chart 2.4 Top five commodities of Export by Growth 2010-11 & 2011-12 21
  5. 5. Annual Report 2011-12Plantation Crops Gems and JewelleryExport of Plantation crops during 2011-12(April– The export of Gems and Jewellery during 2011-October), increased by 39.29 per cent in US $ terms 12(April-October) increased to US $ 27664.09compared with the corresponding period of the million from US $ 16770.33 million during theprevious year. Export of Coffee registered a growth corresponding period of last year showing a growthof 77.50 per cent, the value increasing from US $ of 64.96 per cent.313.53 million to US $ 556.52 million. Export of Tea Chemicals and Related Productsalso increased by 9.34 per cent. During the period 2011-12 (April-October), theAgriculture and Allied Products value of exports of Chemicals and Allied ProductsAgriculture and Allied Products as a group include increased to US $ 21977.24 million from US $Cereals, Pulses, Tobacco, Spices, Nuts and Seeds, 16276.94 million during the same period of theOil Meals, Guar gum Meals, Castor Oil, Shellac, previous year registering a growth of 35.02 perSugar & Molasses, Processed Food, Meat & Meat cent. Rubber, Glass & Other Products, ResidualProducts, etc. During 2011-12 (April–October), Chemicals & Allied Products, Basic Chemicals,exports of commodities under this group registered Pharmaceuticals & Cosmetics and Plastic &a growth of 62.90 per cent with the value of Linoleum have also registered a positive growth.exports increasing from US $ 8165.03 million in the Engineering Goodsprevious year to US $ 13300.63 million during the Items under this group consist of Machinery,current year. Iron & Steel and Other Engineering items. ExportOres and Minerals from this sector during the period 2011-12(April-Exports of Ores and Minerals were estimated at US October) stood at US $ 36694.23 million compared$ 4700.29 million during 2011-12 (April-October) with US $ 27098.96 million during the same periodregistering a negative growth of 8.32 per cent over of the previous year, registering a growth of 35.41the same period of the previous year. Sub groups per cent. The growth in export of Iron & Steel Barviz. Processed Minerals and Iron Ore has recorded rod stood at 51.86 per cent, Transport Equipmentsa negative growth of 17.22 per cent and 23.29 per 39.38 per cent, Primary & semi-finished iron &cent. Coal registered a growth of 35.76 per cent and steel 23.20 per cent, Non ferrous metals 13.59 perOther ores & minerals 78.37 per cent respectively. cent, and Machine Tools at 10.99 per cent.Mica has registered a growth of 5.74 per cent Electronic GoodsLeather and Leather Manufactures During the period 2011-12 (April-October), exportsExport of Leather and Leather Manufactures of Electronic Goods as a group was estimated atrecorded a growth of 27.64 per cent during 2011- US $ 5024.92 million compared with US $ 4299.3612 (April-October). The value of exports increased million during the corresponding period of lastto US $ 2704.51 million from US $ 2118.86 million year, registering a growth of 16.88 per cent.during the same period of the previous year. Exports Textilesof Leather and Manufactures have registered a During the period 2011-12 (April-October), thegrowth of 30.19 per cent and Leather Footwear value of Textiles exports was estimated at US $also registered a growth of 24.55 per cent. 15101.96 million compared with US $ 11987.38 22
  6. 6. CHAPTER-2 Trends in India’s Foreign Trademillion in the corresponding period of the previous Petroleum Productsyear, recording a growth of 25.98 per cent. The Export of Petroleum Products increased to US $export of Readymade Garments registered a 34667.02 million during 2011-12 (April- October),growth of 28.60 per cent, Cotton yarn/Fabrics/ as compared with US $ 21135.13 million duringMade-ups etc. registered a growth of 23.06 per the same period of last year recording a growth ofcent, Wool and Woolen manufactures 54.21 per 64.03 per cent.cent, Coir and coir manufactures 38.85 per cent, Cotton Raw including WasteManmade Textiles & Made Ups has shown agrowth of 30.25 per cent, Natural Silk Textiles and There was a growth in the exports of Cotton RawJute manufactures registered a negative growth of including waste by 178.63 per cent from US $35.15 per cent and 4.67 per cent respectively. 389.52 million in 2010-11 (April-October) to US $Handicrafts and Carpets 1085.30 million during 2011-12 (April- October). Imports by Principal CommoditiesExports of Handicrafts declined to US $ 101.67million during 2011-12 (April- October), from US Disaggregated data on imports by principal$ 128.24 million during the corresponding period commodities, both in Rupee and Dollar terms,of the previous year registering a negative growth available for the period 2011-12 (April– October),of 20.72 per cent. Export of carpets decreased to as compared to the corresponding period of theUS $ 439.66 million from US $ 536.98 million during previous year are given in Table 2.5 and Table 2.6the same period last year registering a negative respectively. Imports of the top five commoditiesgrowth of 18.12 per cent. during the period 2011-12 (April-October)Project Goods registered a share of 62.8 per cent mainly due to significant imports of Petroleum (Crude &During 2011-12 (April-October), the export of Products), Gold, Electronic Goods, Pearls, preciousProject Goods were estimated at US $ 29.05 and semi-precious stones and Machinery exceptmillion compared with US $ 38.18 million during electrical and electronic.the corresponding period of last year registering anegative growth of 23.91 per cent. The share of top five Principal Commodity in India’s total imports during 2011-12 (April– October) is given at Chart 2.5 below: Chart 2.5 Share of Top Five Principal Commodities in India’s Imports 2011-12 (April-October) 23
  7. 7. Annual Report 2011-12The import performance by growth of top five October) vis-a-vis the corresponding period of thePrincipal commodities during 2011-12 (April– previous year is shown at Chart 2.6. Chart 2.6 Top Five Commodities of Import by Growth 2009-10 & 2010-11Fertilizers to US $ 17187.45 million from US $ 16907.33 million during the corresponding period of theDuring 2011-12 (April–October), import of previous year registering a marginal growth of 1.66Fertilizers (manufactured) decreased to US $ per cent.4413.85 million from US $ 4695.51 million in April-October 2011 recording a negative growth of 6.00 Capital Goodsper cent. Import of Capital Goods, largely comprises ofPetroleum Crude & Products Machinery, including Transport Equipment and Electrical Machinery. Import of Machine Tools,The import of Petroleum Crude & Products stood Non-Electrical Machinery, Electrical Machineryat US $ 85002.32 million during 2011-12 (April - and Transport Equipment registered a growth ofOctober) as against US $ 58175.62 million during 43.24 per cent, 26.87 per cent, 26.39 per cent, andthe same period of the previous year registering a (-) 8.74 per cent respectively.growth of 46.11 per cent. Organic and Inorganic ChemicalsPearls, Precious and Semi-Precious Stones During 2011-12 (April– October), import of OrganicImport of Pearls and Precious and Semi-Precious and Inorganic Chemicals increased to US $ 10884.61Stones during 2011-12 (April– October) increased million from US $ 8847.19 million during the same 24
  8. 8. CHAPTER-2 Trends in India’s Foreign Tradeperiod of last year, registering a growth of 23.03 are given in Table 2.3, 2.4, 2.7 and 2.8 respectively.per cent. Import of Medicinal and Pharmaceutical Share of major destinations of India’s Exports andProducts increased to US $ 1615.63 million from US sources of Imports during 2011-12 (April– October)$ 1425.68 million during the corresponding period are given in Chart 2.7 and 2.8 respectively.of last year registering a growth of 13.32 per cent During the period 2011-12 (April– October), theCoal, Coke & Briquettes share of Asia and ASEAN region comprising SouthDuring 2011-12 (April– October), import of Coal, Asia, East Asia, Mid-Eastern and Gulf countriesCoke & Briquettes increased to US $ 9870.14 accounted for 50.69 per cent of India’s totalmillion from US $ 6570.07 million during the same exports. The share of Europe and America in India’speriod of last year, registering a growth of 50.23 exports stood at 19.73 per cent and 16.68 per centper cent. respectively of which EU countries (27) comprisesGold & Silver 17.81 per cent. During the period, United Arab Emirates (11.82 per cent) has been the mostDuring 2011-12 (April– October) import of Gold important country of export destination followedand Silver increased to US $ 38817.81 million from by USA (11.51 per cent), Singapore (6.13 percent),US $ 23320.39 million during the corresponding China (5.35) per cent), Hong Kong (4.44 per cent).period of the previous year registering a growth of66.45 per cent. Asia and ASEAN accounted for 61.36 per cent of India’s total imports during the period followedDirection of India’s Foreign Trade by Europe (19.27 per cent) and America (8.92 perThe value of India’s exports and imports from major cent). Among individual countries the share ofregions/ countries both in Rupee and Dollar terms China stood highest at (12.00 per cent) followed by Chart 2.7 Major Destinations of India’s Exports for 2011-12 (April-October) 25
  9. 9. Annual Report 2011-12UAE (7.51 per cent), Switzerland (7.21 per cent),Saudi Arabia (6.06 per cent), USA (4.78 per cent)Iraq (3.85 per cent), Germany (3.25 per cent),Nigeria (3.25 per cent), Indonesia (3.06 per cent),Australia (2.96 per cent). Chart 2.8 Major Source of India’s Imports for 2011-12 (April-October) 26