Analysis of foreign trade


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Analysis of foreign trade

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Analysis of foreign trade

  1. 1. ANALYSIS OF FOREIGN TRADE Presented by Arghya Prasad Dev Nayan Saha Pretam Laha Pousali Mukherjee Rima Agarwal
  2. 2. INTRODUCTION  After moderating in the two years following the global economic crisis, world trade in both goods and services reached and surpassed pre-crisis levels in 2011.  India's exports, which had surpassed pre-crisis levels within a year in 2010-11 with a record 40.5 per cent growth, continued growing even in 2011-12, but were finally affected by the global slowdown in 2012- 13 with exports declining even more at - 4.9 per cent in the first ten months than the-3.5 per cent recorded during the crisis-ridden year of 2009-10
  3. 3. TRENDS IN GROWTH IN TRADE VOLUMES 2011 2012 2013 2014 World trade volume(goods and services) 5.9 2.8 3.8 5.5 Imports Advanced Economics Emerging market and Developing economics 4.6 8.4 1.2 6.1 2.2 6.5 4.1 7.8 Exports Advanced Economics 5.6 2.1 2.8 4.5 Emerging market and Developing economics 6.6 3.6 5.5 6.9
  4. 4. INDIA'S MERCHANDISE TRADE  India's merchandise trade increased from US$ 95.1billion in 2000-1 to US$ 620.9 billion in 2010-11 and further to US$ 793.8 billion in 2011-12  India's share in global exports and imports also increased from 0.7 per cent and 0.8 per cent respectively in 2000 to 1.7 per cent and 2.5 per cent in 2011  India's total merchandise trade as a percentage of the gross domestic product (GDP) increased from 28.2 percent in 2004- 5 to 43.2 per cent in 2011-12
  5. 5. EXPORT GROWTH AND EXCHANGE RATE CHANGES  Export growth in dollar terms was negative at-4.9 per cent in 2012-13 (April-January), compared to 21.3 per cent growth in 2011-12 (full year). In rupee terms, it was positive at 9.1 per cent, though here too, there was a deceleration from the 28.3 percent 2011-12 (full year).  Export growth has slowed down considerably in India over the last few quarters. Based on GDP data from the expenditure side, the y-o- y growth for real exports of goods and services has decreased from a peak of 36% in 2011Q1 to 4% in 2012Q3.  Merchandise exports have slowed down more; from 34% y-o-y in 2011Q1 to -6% y-o-y in 2012Q3
  6. 6.  The very high export growth rate in rupee terms in 2010-11 is due to the high increase in both volume and unit value indices from the very low base of the previous year.  Crude materials inedible except fuels and manufactured goods contributed to the high increase in unit values, machinery and transport equipment, mineral fuel, lubricants and related materials, and manufactured goods classified chiefly by materials and food and food articles contributed to the high rise in volumes. o The high growth in the unit value index is due to growth in chemicals and related products (41.2 per cent), inedible crude materials other than fuels (41 per cent), and mineral fuels and related materials (36 per cent), growth in the quantum index of exports is mainly due to growth in food and food articles (35.9 per cent) machinery and transport equipment (28.0 per cent) and miscellaneous manufactured articles (16.8 per cent). TRADE QUANTUMS AND UNIT VALUES
  7. 7. EXPORT PERFORMANCE OF INDIA AND EDES  The share of the select Emerging and Developing Economies (EDEs) in the US$ 18 trillion world exports in 2011 has increased to a sizeable41 per cent with a change in share of 15.6 percent over 20  The performance of China is spectacular with its share in world exports increasing by 6.6 percentage points between 2000 and 2011  China's export growth rate at 20.3 per cent in 2011 was substantially lower than that of India. India's export growth rate of33.8 per cent in 2011 over and above the 37.3 percent growth of 2010 is one of the highest in the world.
  8. 8. INDIA'S IMPORT GROWTH  After recovering in 2010-11 from the previous year's fall, India's merchandise imports increased further to US$ 489.2 billion with a growth of 32.3 percent in 2011-12  POL import volume growth decelerated from14.9 per cent in 2009-10 to 3.7 per cent in 2010-11and 3.5 per cent in 2011-12.From2009 onwards, oil price has been increasing , reaching US$ 125.33/bbl in March 2012  Gold and silver imports (with a share of 12.6per cent in India's total imports) grew by 44.5 percent in 2011-12. Gold imports alone accounted for91.7 per cent of the total imports of gold and silver. In 2011-12, gold imports grew by 38.8 per cent in value and 11.2 per cent in volume terms
  9. 9. TRADE COMPOSITION  Export composition  The share of primary products in India's exports fell over the years from 16 per cent in 2000-1, in 2012-13 (April-November) it regained the share of 16 percent mainly due to the export of agricultural items like rice  The share of manufacturing exports fell drastically from 78.8 percent in 2000-1 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  Share of petroleum, crude& products exports, which also include refined items, increased from 4.3 per cent in 2000-1 to 18.3 percent in 2011-12 and 18.6 per cent in 2012-13
  10. 10. TRADE COMPOSITION  The reason for India's export growth in 2012-13 (April-November) being more negative than in2009-10 in the aftermath of the global recession can be seen from India's commodity-country export performance. India's exports to EU and China have been more negative during the recent global slow down than in 2009-10, while its performance to USA has been better for most of the sectors except gems and jewellery.  Export diversification  In 2011, India had a global export share of 1per cent or more in 53 out of a total of 99 commodities at the two-digit harmonized system (HS) level. While noticeable changes can be seen in India's market diversification, the same is not the case with its export basket diversification Import composition  The share of POL imports increased from 28.7 per cent in 2010-11 to 31.7 per cent in2011-12 (with a very high growth rate) and 34.6 percent in 2012-13 (April-November). The share of gold and silver imports increased from 9.3 per cent in2000-1 to 12.6 per cent in 2011-12 with a high import
  11. 11. Campus Ahmedabad Campus: Karnavati Knowledge Village, A/907,Uvarsad, S.G.Highway, Gandhinagar Kolkata Campus: Infinity Benchmark Tower 10th Floor, Plot - G1, Block - EP& GP, Sec - V, Salt Lake, Kolkata. Reg. Office: 407, Zodiac Square, 4th Floor Opp. Gurudwara, S.G. Road, Bodakdev, Ahmedabad.