India's exports and imports increased in March 2011 compared to March 2010. Exports grew 43.8% to $29.1 billion while imports grew 17.2% to $34.7 billion, resulting in a trade deficit of $5.6 billion. For the fiscal year April 2010-March 2011, exports grew 37.5% to $245.9 billion and imports grew 21.6% to $350.7 billion, resulting in a lower trade deficit of $104.8 billion compared to the previous fiscal year. Crude oil imports grew 8.2% in March 2011 and 16.7% for the fiscal year while non-oil imports grew 21% in March 2011 and 23.7% for

1. INDIA’S FOREIGN TRADE: MARCH, 2011<br />A. EXPORTS (including re-exports) <br /> Exports during March, 2011 were valued at US $ 29134.89 million (Rs. 131081.97 crore) which was 43.8 per cent higher in Dollar terms (42.2 per cent higher in Rupee terms) than the level of US $ 20254.14 million (Rs. 92149.26 crore) during March, 2010. Cumulative value of exports for the period April-March 2010 -11 was US $ 245868.29 million (Rs 1118822.85 crore) as against US $ 178751.41 million (Rs. 845533.62 crore) registering a growth of 37.5 per cent in Dollar terms and 32.3 per cent in Rupee terms over the same period last year.<br /> B. IMPORTS<br /> Imports during March, 2011 were valued at US $ 34743.08 million (Rs.156314.00 crore) representing a growth of 17.2 per cent in Dollar terms (15.9 per cent in Rupee terms) over the level of imports valued at US $ 29626.87 million ( Rs. 134791.91 crore) in March, 2010. Cumulative value of imports for the period April-March, 2010-11 was US $ 350694.97 million (Rs. 1596869.37 crore) as against US $ 288372.87 million (Rs. 1363735.55 crore) registering a growth of 21.6 per cent in Dollar terms and 17.1 per cent in Rupee terms over the same period last year.<br /> <br />C. CRUDE OIL AND NON-OIL IMPORTS: <br /> Oil imports during March, 2011 were valued at US $ 9438.6 million which was 8.2 per cent higher than oil imports valued at US $ 8721.6 million in the corresponding period last year. Oil imports during April-March, 2010-11 were valued at US$ 101689.2 million which was 16.7 per cent higher than the oil imports of US $ 87135.9 million in the corresponding period last year. Non-oil imports during March, 2011 were estimated at US $ 25304.5 million which was 21.0 per cent higher than non-oil imports of US $ 20905.3 million in March, 2010. Non-oil imports during April - March, 2010-11 were valued at US$ 249005.7 million which was 23.7 per cent higher than the level of such imports valued at US$ 201236.9 million in April - March, 2009-10.<br /> <br />D. TRADE BALANCE <br /> The trade deficit for April - March, 2010-11 was estimated at US $ 104826.68 million which was lower than the deficit of US $ 109621.46 million during April -March, 2009-10. <br />The seventh largest and second most populous country in the world, India has long been considered a country of unrealised potential. A new spirit of economic freedom is now stirring in the country, bringing sweeping changes in its wake. A series of ambitious economic reforms aimed at deregulating the country and stimulating foreign investment has moved India firmly into the front ranks of the rapidly growing Asia Pacific region and unleashed the latent strengths of a complex and rapidly changing nation. <br />India's process of economic reform is firmly rooted in a political consensus that spans her diverse political parties. India's democracy is a known and stable factor, which has taken deep roots over nearly half a century. Importantly, India has no fundamental conflict between its political and economic systems. Its political institutions have fostered an open society with strong collective and individual rights and an environment supportive of free economic enterprise. <br />India's time tested institutions offer foreign investors a transparent environment that guarantees the security of their <br />long term investments. These include a free and vibrant press, a judiciary which can and does overrule the government, a sophisticated legal and accounting system and a user friendly intellectual infrastructure. India's dynamic and highly competitive private sector has long been the backbone of its economic activity. It accounts for over 75% of its Gross Domestic Product and offers considerable scope for joint ventures and collaborations. <br />Today, India is one of the most exciting emerging markets in the world. Skilled managerial and technical manpower that match the best available in the world and a middle class whose size exceeds the population of the USA or the European Union, provide India with a distinct cutting edge in global competition. <br />Foreign Collaboration Policies<br />India's effort to accelerate industrialisation & improve international competitiveness received a boost with the announcement of the New Industrial Policy in July 1991. A key element of the Industrial Policy & an important component of the reform program is the freah approach towards foreign investment & technological tie-ups. The Policy changes were designed to attract significant & sustained capital inflows into India, while encouraging technological collaboration between Indian & foreign companies. <br />Foreign Investment Policies <br />Majority foreign equity, even upto 100%, is allowed in several sectors . <br />Foreign investment upto 51% in 35 high priority areas is eligible for automatic aproval, provided by Reserve Bank of India, within 2 weeks of application. <br />Use of foreign brand names & trademarks for sale of goods in India is allowed. <br />Foreign companies are allowed to open branch offices in India. <br />Hotels & tourism related industries are also eligible for automatic approval for direct foreign investment with upto 51% equity. <br />Foreign Institutional Investors (FIIs) have been allowed to invest in the Indian capital market. Foreign investment has been allowed in off-shore funds promoted by Indian Finanacial Institutions. Indian companies have been allowed to float Global Depository receipts (GDRs), which are traded in majot international stock exchanges. <br />There is now a market determined exchange rate for the rupee. Foreign exchange is freely available for a number of purposes like payment of royalites, lumpsum fees, dividends, business travel abroad etc. <br />Other proposals for foreign equity investment shall also be considered on case-tocase basis for clearance by Secretariat for Industrial Approvals. <br />Indian Joint Ventures Abroad<br />Indian joint ventures (Jvs) & wholly owned subsidiaries are an important instrument for promoting exports, trade expansion & economic cooperation. India's foreign investment is the highest amongst 3rd world countries & is dispersed over 70 countries. As on 31st Decemeber 1994, there were 524 joint ventures, of which 177 were in operation & 347 at different stages of implementation. The Indian equity in the 177 Jvs was Rs 1,817 million in Dec 1994 & the approved Indian equity in the 347 Jvs was Rs 13,952 million. <br />Impact of New Policy and Future Direction<br />The new Policy has brought about dramatic change in the foreign currency reserves of the Government of India - taking it to US$ 20.8 billion at end-March 1995. <br />7,200 foreign collaboration proposals were approved in the post-policy period from August 1991 to September 1995. <br />The focus of the government in 1994-95 continued to be on creating a free environment for trade, streamlining & simplification of procedures, increasing export production, sharpening competitive edges & focussing on quality & technological upgradation. During the year several measures were taken for export promotion, aimed at consolidating the growth of 18.3% achieved in (US) dollar terms in 1994-95. Some of the measures taken are :- <br />Rupee has been made convertible on the current account <br />Exporters & units in Export Processing Zones, Software Technology Parks, are now allowed to retain a higher percentage of their forex earnings <br />National Centre for Trade Information has been launched to facilitate greater access to trade information <br />The World Trade Organisation (WTO) agreement has been signed <br />Pass Book Scheme has been introduced for all Export Houses/Trading Houses/Star Trading Houses/Super Star Trading Houses. <br />A harmonised system of commodity classification known as Indian Trade Classification has been introduced. <br />However, India still has a long way to go - it's share in world exports was a mere 0.65% in 1994-95. India imported Rs.887 billion of goods in 1994-95, and exported Rs.823 billion. <br /> <br />EXPORTS & IMPORTS : (US $ Million)(PROVISIONAL) MARCHAPRIL-MARCHEXPORTS(including re-exports) 2009-1020254.14178751.412010-1129134.89245868.29%Growth2010-11/ 2009-201043.8537.55IMPORTS 2009-1029626.87288372.872010-1134743.08350694.97%Growth2010-11/ 2009-201017.2721.61TRADE BALANCE 2009-2010-9372.73-109621.462010-11-5608.19-104826.68 EXPORTS & IMPORTS : (Rs. Crore)(PROVISIONAL)MARCHAPRIL-MARCH EXPORTS(including re-exports) 2009-1092149.26845533.622010-11131081.971118822.85%Growth2010-11/ 2009-201042.2532.32IMPORTS 2009-10134791.911363735.552010-11156314.001596869.37%Growth2010-11/ 2009-201015.9717.10TRADE BALANCE 2009-2010-42642.65-518201.932010-11-25232.03-478046.52<br /> <br />INDIA's FOREIGN TRADE POLICY 2009-14 -- HIGHLIGHTS-VRK100-10112009 <br />Rama Krishna Vadlamudi November 10th, 2009India’s Commerce Minister Anand Sharma, on August 27, 2009, announced India’s Foreign Trade Policy for 2009-14. The following are the highlights of the new Foreign Trade Policy (FTP): Govt to continue tax refund scheme for exporters until December 2010 Widens scope for products to be included for benefits under Focus Product Scheme (FPS). Additional engineering products, plastic and some electronics get a look in. Incentives under FPS raised from 1.25% to 2%. Twenty-six new markets have been added under Focus Market Scheme (FMS). Incentive available under FMS raised from 2.5 per cent to 3 per cent. To aid technological upgradation of export sector, EPCG Scheme at Zero Duty has been introduced Taking into account the decline in exports, the facility of Re-fixation of Annual Average Export Obligation for a particular financial year in which there is decline in exports from the country, has been extended for the 5-year Policy period 2009-14. support for Green products and products from North East To impart stability to the Policy regime, Duty Entitlement Passbook (DEPB) Scheme is extended beyond 31.12.2009 till 31.12.2010 To neutralize duty incidence on gold jewellery exports, it has now been decided to allow Duty Drawback on such exports To reduce transaction and handling costs, a single window system to facilitate export of perishable agricultural produce has been introduced To simplify claims under FPS, requirement of “Handloom Mark’ for availing benefits under FPS has been removed Income tax expemption to 100% EOUs and to STPI units under Section 10B and 10A of Income Tax Act has been extended for the financial year 2010-11 in the Budget 2009-10 In order to make India World’s diamond hub, it’s planned to establish Diamond Bourses EOUs have been allowed to sell products manufactured by the in DTA (domestic tariff area) up to a limit of 90 per cent instead of existing 75 per cent, without changing the criteria of ‘similar goods’, within the overall entitlement of 50 per cent for DTA sale<br />http://ramakrishnavadlamudi.blogspot.com/2009/12/indias-foreign-trade-policy-2009-14.html<br />BY S.ARUN, MBA<br />