Project Report

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Project Report

  1. 1. Summer Training Project Analysis of import and export data of the industries and companies Project Guide: Submitted by; Mr. Bhavnesh Lodha Kundan Vyas Business Development Executive PGDM Cyberlog Technologies Pte. Ltd. Aravali Institute of Management
  2. 2. 2 TABLE OF CONTENTS 1. Executive Summary...........................................................3 2. India’s Foreign Trade an Overview.................................5 3. Structure of Indian Industry............................................8 a) Tea and Coffee.....................................................................10 b) Sugar.....................................................................................12 c) Tobacco.................................................................................15 d) Beverage...............................................................................16 e) Leather..................................................................................18 f) Gems & Jewellery................................................................20 g) Cement..................................................................................22 h) Textile...................................................................................24 i) Iron & Steel..........................................................................26 j) Aluminum & Copper............................................................27 k) Machinery.............................................................................28 l) Plastic....................................................................................29 m) Organic and In-Organic Chemical.......................................31 n) Fertilizer................................................................................32 o) Pharmaceutical.....................................................................33 p) Cosmetic...............................................................................34 q) Electronic Goods..................................................................35 4. Findings...............................................................................39 5. Bibliography........................................................................43 6. Annexure.............................................................................44 a) Table 1: Export of India Country-wise for the year 2003-04 and 2004-05 b) Table 2: Export of India Country-wise for the year 2005-06 and 2006-07 up to September c) Table 3: Import of India Country-wise for the year 2003-04 and 2004-05 d) Table 4: Import of India Country-wise for the year 2005-06 and 2006-07 up to September
  3. 3. 3 EXECUTIVE SUMMARY For decades after independence in 1947, India embarked on a program of autarky (national economic self-sufficiency) which included import substitution policies. By 1991, however, a sluggish economy combined with the forces of globalization led to a more open Indian economy. There was simultaneously a gradual rise in exports, imports, foreign direct investment (FDI), and overall economic growth. In the 1990s, exports of goods and services rose from 6.2 percent to 8.2 percent of total output. By the end of the decade, however, growth in exports began to level off due to reduced international demand, especially with India's main economic partners, the United States and the European Union (EU). Indian exports were further hit by serious competition from east Asian countries, which had recently experienced depreciated domestic currencies, which led to a decline in global prices for their manufactured goods. As a result, exports of Indian textiles, chemicals, machinery, electronic goods, and automotive parts all began to decline. As compared to a couple of decades earlier, however, the size of India's foreign trade has noticeably expanded, both in absolute terms and relative to the country's GDP. Exports have again picked up since 1999, when they showed a 13 percent growth. Imports have also ballooned, showing an average of 20 percent growth per year during 1992-2000. Total exports in 2001 are expected to be near US$46 billion and total imports at US$51 billion. Petroleum constitutes the largest import item at more than US$6 billion and accounts for 14 percent of total imports in 1999. Petroleum imports may be as high as US$17 billion in 2001. Gems and jewelry constitute the single largest export item, accounting for 16 percent of exports and earning about US$4.5 billion in 1999. The top 3 export destinations of Indian goods were the United States, Britain, and Germany, which together constituted one-third of total Indian exports in 1999. In turn, the top 3 import sources were the United States, Britain, and Belgium, together constituting 21 percent of total imported items. Indian economy grew in 2006/07 at a pace that was stronger than most had expected. The surge (of 20 per cent plus) in merchandise imports has continued into its fifth year. Although merchandise exports have also grown at a similar pace, given that imports are considerably larger than exports, the merchandise trade deficit has continued to expand. In 2005/06 the merchandise trade deficit rose to (US) $46 billion, compared to $14 billion a couple of years ago (2003/04). It is estimated that in 2006/07, merchandise exports will increase to $126 billion and imports to $186 billion, thereby leaving merchandise trade deficit of $60 billion. These estimates are compatible with the data releases of the Director General of Commercial Intelligence & Statistics (DGCI&S).
  4. 4. 4 Export Industry-wise data for April-December 2006 revealed that exports of primary products and manufactured products recorded a moderation in growth, while, petroleum products maintained the growth momentum. Engineering goods, which accounted for 34.9 per cent of manufactured exports, continued to remain as the growth driver of exports. The moderation in the exports of primary products during April-December 2006 was due to the decline in the exports of iron ore and cashew and also the deceleration in wheat, rice and marine products. At the same time, exports of traditional agricultural products such as sugar, raw cotton, tea, coffee, tobacco, spices and oil meal registered strong growth. In the manufactured exports, with the exception of engineering goods, all the other major items (chemicals, gems and jewellery and textiles) showed a moderation in export growth. Engineering goods recorded a growth of 38.0 per cent during April- December 2006 (33.4 per cent a year ago) mainly due to the strong export performance of machinery and instruments, and iron and steel. These two items together contributed to 46 per cent of the growth in the exports of engineering goods. The US, the UAE, Germany and Italy were the major markets for these products. Gems and jeweler exports recorded a marginal growth (0.4 per cent) during April- December 2006 as against 19.7 per cent registered a year ago. Exports of chemicals and related products showed a deceleration in growth during April-December 2006. Import India’s merchandise imports posted a growth of 27.8 per cent during April-February 2006-07 (32.7 per cent a year ago) with the imports of petroleum, oil and lubricants (POL) showing some moderation, while non-oil imports maintained the growth momentum. Industry-wise analysis shows that the imports of capital goods during April-December 2006 at 36.2 per cent showed a moderation in growth (41.0 per cent in the corresponding period a year ago). However, within the capital goods, electrical machinery and electronic goods maintained high growth. Exports of ‘mainly export related items’ showed a decline during April-December 2006 with imports of chemicals, and textile yarn showing a deceleration in growth and pearls, precious and semi-precious stones and cashew nuts registering a decline. Source-wise, China was the major source of imports during April-December 2006, accounting for 9.4 per cent of total imports, followed by Saudi Arabia (7.6 per cent), the US (5.7 per cent), UAE (4.8 per cent) and Iran (4.2 per cent). Region-wise imports from OPEC countries showed marked rise during April-December 2006, mainly reflecting imports of POL (for the previous year, country-wise break up of oil imports was not furnished by DGCI&S).
  5. 5. 5 India’s Foreign Trade an Overview Whole world has recognized India as super power of 21st century. India is youngest county in the world growing a rate of more than 8 percent. Large population of India provides market to the countries of the world. At the same time it provides opportunities to India in terms of extracting the potentials of its manpower and other resources to emerge as real super power. India's foreign trade should also reflect her potentials to emerge as a super power A merchandise export of India is continuously growing as the figure 1.1 shows a (CAGR) of 26% in FY2006 from FY2002 and same the merchandise import also has shown the (CAGR) of 29%. In the FY2002 the merchandise export of India was US $ 44 billion and in the FY2006 it is US $ 142 billion, and merchandise import has shown an increase of US $ 91 billion from the FY2002 to FY2006.India’s total trade turnover has also increase by US $ 50 billion.1 Figure 1.1 1 Exim Bank of India, www.eximbank.com
  6. 6. 6 Export Major part of India’s export goes to USA followed by United Arab Emirate and China as shown in figure 1.2. In the FY2006 India export to USA of US $ 17,353.06 Million and having a share of 17% of total India’s export (table a) and China with 8.3% share at the second place.2 Export:Country-wise JAPAN ITALY BELGIUM GERMANY Country UK HONG KONG 2005-06 SINGAPORE 2004-05 CHINA U ARAB USA 0 2 4 6 8 10 12 14 16 18 %Share Figure1.2 Chart shows the major exporting countries of India3 Country 2004-05 2005-06 %Share %share USA 16.4788 16.8328 U ARAB EMTS 8.7961 8.3342 CHINA 6.7227 5.2626 SINGAPORE 4.7891 6.5565 HONG KONG 4.4194 4.9076 UK 4.4066 4.3373 GERMANY 3.3833 3.4786 BELGIUM 3.0043 2.4435 ITALY 2.7365 2.7852 JAPAN 2.5473 1.4811 Table a: Table shows the share of countries in India’s total export 2 Director General of Foreign Trade, www.dgft.delhi.nic 3 DGCI&S, Kolkatta
  7. 7. 7 Import USA is the biggest importer for India, UAE and Germany are at second and third place respectively. In Figure 1.3 Import from USA was US $ 9,454 million in FY2006.4 Figure 1.3 Chart showing the major import of India Import: Country-wise Import: Country-wise 30,000 2525,000 20,000 20 US $ Million 15,000 2004-05 15 2005-06 10,000 %Share 2004-05 10 5,000 2005-06 0 5 UNSPEC IFIED C HINA U S A SWITZERLAND UAE BELGIUM Trade to GERM ANY AUSTRALIA UK Unspecified C ountries 0 Country UNSPEC IFIED C HINA USA SWITZERLA ND UAE BELGIUM Trade to GERM A NY A USTRALIA UK Unspecified C ountries Country USA holds the major share in India’s total import i.e. 6.5%.as shown in figure 1.4. Figure 1.4 Chart showing the share of countries in Indian import 4 www.dgft.delhi.nic.in
  8. 8. 8 Structure of Indian Industry Indian industry is classified as per the Ministry of Commerce, GOI in the HS (Harmonized system) code with 17 section and 99 chapters and Indian commodities are classified as Principal Commodities.5 Table 1: Principal Commodities of India are: Export Import BULK IMPORTS PLANTATION Cereals & Preparations Tea Rice Coffee Wheat AGRI & ALLIED PRODUCTS Other cereals Cereal Preparations Rice Fertilizers Wheat Crude Others Sulphur & Un-roasted pyrites Pulses Manufactured Tobacco Edible Oil Unmanufactured Sugar Manufactured Pulp & waste paper Spices Paper board & mfrs Nuts & Seeds Cashew inclusive CSNL Newsprint Crude rubber Sesame & Niger seed Non-ferrous metals Ground nut Metalliferrous ores & products Oil Meals Iron & Steel Guergum Meal Petroleum crude & products Castor Oil PEARLS, PRECIOUS & SEMI-PRECIOUS Shellac STONES MACHINERY Sugar & Molasses Machine Tools Processed Foods Machinery other than electrical Fresh Fruits & Vegetables Electrical machinery Fruits/Vegetable seeds Transport equipment Processed & misc. processed items PROJECT GOODS Meat & Preparations OTHERS Poultry & Dairy Products Cashew Nuts Floriculture Products Fruits & Nuts Spirit & Beverages Wool raw MARINE PRODUCTS Silk raw ORES & MINERALS Synthetic .®.fibers Iron ore Pulses Mica Raw Hides & Skins Processed Minerals Leather Other ores & minerals Coal,coke&briquettes Coal Non-metallic minerals, manufacture . LEATHER & MNFRS Other crude minerals Footwear Organic Inorganic chemicals. Leather & mfrs Dyeing, tanning material. GEMS & JEWELER Medicinal & Pharma products. SPORTS GOODS Artf.resins, etc. CHEMICALS & RELATED PRODUCTS 5 A book on Indian Trade and Industry Classification by Kumar & Garg
  9. 9. 9 Chemical products Basic chemicals, Pharma & cosmetics Other Textile yarn, fabrics, etc Plastics & Linoleum Manufactures of metals Rubber, glass & other products Profile. instruments, etc. Residual chemicals allied products Electronic goods ENGINEERING GOODS Wood and wood products Machinery Gold & Silver Machine tools Tea Machinery & Instruments Woolen Yarn and Fabrics Transport equipments Cotton yarn and fabrics Iron & Steel Man made f'mnt spun yarn Iron & Steel Bar rod etc Made up textile articles Primary & semi-finished iron & steel Ready made garments (wov.) Other Engineering Items Silk yarn and fabrics Ferro Alloys Milk & Cream Aluminum other than products Spices Non ferrous metals Oil seeds Manufacture of metals Jute raw Residual Engineering items Woolen & Cotton rags ELECTRONIC GOODS Veg. & animal fats Electronics Cotton raw and waste Computer Software in physical form Essential oils & Casper PROJECT GOODS Cement TEXTILES Computer Soft. physical form Readymade garments Other Commodities Cotton, yarn, fabrics, made-ups etc Manmade textiles & made-ups etc Natural Silk textiles Wool & woolen mfrs Coir & coir mfrs Jute mfrs HANDICRAFTS CARPETS Hand-made excl silk Mill-made excl silk Silk carpets COTTON RAW INCL WASTE PETROLEUM PRODUCTS UNCLASSIFIED EXPORTS
  10. 10. 10 Tea and Coffee Industry in India The tea industry has an important and special place in the Indian economy. Tea is the country's primary beverage, with almost 85% of total households in the country consuming tea. India is the world's largest producer and consumer of tea, with India accounting for 27% of the world tea production. India's expenditure on beverages and processed foods accounts for 8% of food expenditure in rural areas, and 15% in urban areas. India is also an important tea exporter, accounting for around 12-13% of world tea exports. Further, certain varieties of tea (for example Darjeeling) are grown only in India and are in great demand across the world. All Darjeeling teas possess the lightness of flavors and fine coloring that set them apart from all other teas. India's tea industry exports were estimated at US $ 905.11 million during FY2006, accounting for 0.4% of India’s exports. In value terms, tea ranks as the fourth-largest agricultural product export item from India, with exports of around US$410 million in 2004. In terms of employment, the tea industry employs around 1.27 million people at tea plantations and 2 million people indirectly, of which 50% are women. The last fact is particularly important when we consider that tea industry, to a large extent, drives the economies of the regions where the tea gardens are concentrated, for example Assam. Tea is the prime beverage consumed in India, and private final consumption expenditure (PFCE) on tea, coffee and cocoa aggregated Rs. 134.96 billion in FY2005, accounting for around 2% of India's PFCE on food, and 0.7% of India's PFCE. The latest available data indicates that tea accounts for 90.6% for India's consumption of stimulants (tea, coffee, and cocoa beans), followed by coffee (7.7%), and cocoa beans (1.7%). Year Value in US $ Million Volume Qty in thousands 2003-04 716.32 566,660.19 2004-05 828.89 638,823.25 2005-06 905.11 628,617.75 2006 up to 591.74 383,254.63 Sep. Table 2: Showing the Export of Tea and Coffee Industry from India in past years
  11. 11. 11 Value of Tea and Coffee 1,400 1,200 1,000 800 Value in US $ Million 600 400 200 0 2003 2004 2005 2006 2007 2008 2009 upto Sep. Year Figure 1.6 Showing the India’s export of Tea and Coffee in value Above chart showing the continuous increase in export of tea and coffee in value from India in last three years and forecasting is also reflecting the same. And figure 1.6 shows the export in volume. Volume of Tea and Coffee 800,000 700,000 600,000 500,000 Qty in Thousands 400,000 300,000 200,000 100,000 0 2003 2004 2005 2006 2007 2008 2009 upto Sep. Year Figure 1.7 Showing the India’s export of Tea and Coffee in Volume In spite of accounting for around 27% of world's tea production, India accounts for only 12% of world's tea exports. India's international competitiveness in tea exports has been on a decline. From being a pre-eminent supplier of the world's tea, India has lost ground in virtually every export market. In the early 1980s, Indian tea exports accounted for around 40% of the domestic production. By the end of 1980s, the share of the tea exports fell to 30%. The decline continued till 1994 when exports accounted for only 20% of the domestic production of tea. Thereafter, the proportion of exports improved to around 24% of the domestic production during 2003. In recent years, the tea industry has accounted for a declining share of gross bank credit (GBC) of scheduled commercial banks (SCBs). With GBC of Rs. 13.55 billion in March 2005, the tea industry accounted for 0.37% of industry GBC of SCBs in March 2005, as compared with 1.08% in March 1995.
  12. 12. 12 Sugar Industry in India Sugar is a prime requirement of the diet in every household in India, accounting for around 5.5% of India’s private final consumption expenditure (PFCE) on food, and 2% of India’s PFCE. In terms of PFCE, the share of sugar and gur (solidified cane juice) in total food expenditure remained at around 6-7% during the 1980s and 1990s. The share declined sharply during FY2004 because of significant decline in sugar prices. With an estimated production of 18.6 mt in sugar year or (Sugar Year) SY2006 (sugar year is from October-September), India is the second largest sugar producer in the world (after Brazil), accounting for around 10-12% of world’s sugar production. Sugar is India’s second largest agro-processing industry. In recent years, the sugar sector has accounted for a declining share of gross bank credit (GBC) of scheduled commercial banks (SCBs), largely because of decline in credit during FY2005. With GBC of Rs. 60.30 billion in March 2005, the sugar industry accounted for 1.65% of industry GBC of SCBs in March 2005, as compared with 1.91% in March 2000. India’s sugarcane and sugar production is expected to increase in SY2006 because of a 10.3% increase in acreage under sugarcane—from 3.8 million ha in 2004 to 4.1 million ha in 2005. UP accounts for more than 50% of the sugarcane average, 47% of sugarcane production, and 40% of sugar production. Thus, India’s sugar production declined in SY2002, SY2004, and SY2005 because of deficient monsoon conditions in East and West UP, and a decline in area under sugarcane in these regions. India’s total consumption of sugar has increased steadily despite fluctuations in production. Sugar consumption during SY2005 was estimated at around 19.6 mt. Consumption has increased at a 5-year compound average growth rate (CAGR) of 4.8%. Consumption increased at a 5-year CAGR of 5.2% during 1995-2000. Sugar consumption is expected to increase at around 4.5% during SY2006-07, because of strong economic growth, higher population, improved domestic supplies, and increased demand for sugar from the beverages sector.6 India was the world’s second largest producer of sugar during 2005-06. Although the raw material cost (estimated to account for 75% of the operating cost of the sugar manufacturers) is regulated in the Indian sugar industry, scale economies do have the potential of affecting the operating cost structures of sugar manufacturers. 6 www.icra.in
  13. 13. 13 Export of Sugar 1,400,000 1,200,000 1,000,000 800,000 Qty in Thousand 600,000 Sugar 400,000 200,000 0 2003 2004 2005 2006 upto Sep. Year Figure 1.8 Showing Export of Sugar in Volume India’s sugar exports are expected to decline during FY2007 because of the July 2006 notification by the GoI to ban sugar exports till March 2007. The ban would, however, not be applicable to sugar exports on preferential quota to the US and the EU. Sugar exports to the US and the EU would be permitted only through the Indian Sugar Exim Corporation Ltd. Export of Sugar 600 500 400 Value in 300 US $ Million 200 Sugar 100 0 2003 2004 2005 2006 upto Sep. Year Figure 1.8 Showing the Export of Sugar in Value
  14. 14. 14 Sugar 2,000,000 1,500,000 Qty in Thousand 1,000,000 Sugar 500,000 0 2003 2004 2005 2006 upto Sep. Year Figure1.9 Showing the Import of sugar in Volume India’s sugar imports declined significantly during FY2001-03 because of rising domestic availability and increase in customs duties. However, imports increased during FY2004 and FY2005, because of lower domestic supply. In order to augment sugar stocks for 2004-05 and enable the Government to meet the normative 3 months consumption requirement of the country, the Advance License (AL) Scheme was liberalized for raw sugar import, in as much as the imported raw sugar under AL can be now processed into white sugar, sold in the domestic market, and allowing such importers to fulfill export obligation within 24 months period or such extended period as allowed by exporting indigenously manufactured white sugar.7 Sugar 300 250 200 Value in 150 US $ Million 100 Sugar 50 0 2003 2004 2005 2006 upto Sep. Year Figure 1.10 Showing the Import of Sugar in Value 7 DGCI&S, GOI
  15. 15. 15 Tobacco Industry in India The tobacco industry estimates that globally, 33 million people are engaged in tobacco cultivation. However, this figure includes not only farmers who rely entirely on tobacco, but also farmers who grow other crops besides tobacco, seasonal laborers, family members and other part-time workers. Of these 33 million, approximately 15 million are in China and 3.5 million in India. Although tobacco is grown in more than 100 countries, just four countries (Brazil, China, India and the United States) account for two-thirds of total global production and only two countries, Malawi and Zimbabwe, are significantly dependent on export earnings from tobacco.1 Out of the 141 countries that export tobacco, only 18 derive more than one percent of their total export earnings from tobacco. In only four of those 18 countries do tobacco exports account for more than five percent of total export earnings. Export of tobacco from India has increase in the FY2005 and FY2006 after the decline in the FY2004. Tobacco 180,000 160,000 140,000 120,000 Volume in 100,000 80,000 Quantity 60,000 Tobacco 40,000 20,000 0 2003 2004 2005 2006 upto Sep. Year Figure 1.11 Showing the Volume of Tobacco Exported Tobacco 350 300 250 Value in 200 US $ Million 150 Tobacco 100 50 0 2003 2004 2005 2006 upto Sep. Year Figure 1.12 Showing the value of Tobacco Exported
  16. 16. 16 Beverage Industry in India Food and Beverages segment as compared to the previous year based on the estimates made by the industry and interaction with the concerned representatives in the industry. The industry is estimated to have achieved higher growth of 8 per cent in 2004-05 with an estimated figure of Rs. 3584 billion. The overall industry has achieved a growth rate of 8 % in value terms during 2004-05. Beverage industry’s export of India is growing with the rate of 13-16% p.a. as shown in the table b. Both in the term of volume and value it is becoming the important to the Indian economy Value in US $ Volume Qty in Year Million thousands 2003 27.22 35,092.86 2004 31.63 40,792.45 2005 58.32 83,541.51 2006 up to Sep. 30.09 38,035.38 Table b: Showing the Export of Indian Beverage Industry over the last few years Export of Beverage from India 90,000 80,000 70,000 60,000 50,000 Qty in Thousands 40,000 30,000 20,000 Beverage 10,000 0 2003 2004 2005 2006 upto Sep. Year Figure 1.13 showing the export of Indian Beverage Industry in volume
  17. 17. 17 Some sectors which have recorded Moderate and single digit growth are – Food & Beverage (8%) , Bread (7.5%), Bread/ Organized (8%) , Culinary products/Snack food(8%),Fruits and vegetables(5%) , Milk and Dairy products (4.5%), Milk (4.5) , Milk liquid /packaged(5%), Milk Products(8%), Milk powder including infant milk(7%), Ghee(5.5%),Cheese/ Panner(8%) , Chocolates (8%), Sugar Confectionary/Gums(4%) , Health Beverages/Malted Food(8%) , Tea (7%) . Export of Beverage from India 60 50 40 Value in 30 US $ Million 20 Beverage 10 0 2003 2004 2005 2006 upto Sep. Year Figure 1.14 Showing the export of Beverage Industry in value
  18. 18. 18 Leather Industry in India The global leather industry is valued at about US$ 85 billion. Most of the producing countries are developing countries, while developed markets such as the US are major consumers of leather products China and Italy are the leading producing and exporting nations in the world with exports worth US$ 19 billion and US$ 13 billion respectively. India, with an output of US$ 4 billion and exports of US$ 2.4 billion, is placed third. India has a 2.32 per cent share in the global leather trade and ranks eighth in the world in terms of the country’s foreign exchange earnings from the industry. The composition of exports has also been changing, with more and more value added products being exported. In 2004-05, for example, value added finished products constituted around 80 per cent of the total exports from the industry. India has plans to double its leather exports over the next 5 years. It has been estimated that India has the capacity to meet nearly 10 per cent of global leather requirement. The Indian leather industry comprises the following key sub-sectors - tanning and finishing, footwear, footwear components, leather garments and leather goods and accessories. A large part (nearly 60-65 per cent) of the production is done by the small/ cottage sector. Leather and leather products production is centred in southern, northern and eastern India. Key production units are located in Tamil Nadu, West Bengal, Uttar Pradesh, Punjab, Karnataka, Andhra Pradesh, Haryana and Delhi. Tamil Nadu is the biggest leather exporter in the country with the south accounting for 43 per cent of the country’s share. The industry uses primarily indigenous natural resources with little dependence on imported resources. Export of Leather from India 1,800 1,600 1,400 1,200 Value in 1,000 US $ Million 800 600 400 200 Leather 0 2003 2004 2005 2006 2007 2008 2009 upto Sep. Year Figure 1.15 Showing the Export of Leather Industry of India in Value
  19. 19. 19 Export of Leather from India 300,000 250,000 200,000 Qty in thousand 150,000 100,000 50,000 Leather 0 2003 2004 2005 2006 2007 2008 2009 upto Sep. Year Figure 1.16 Showing the Total Export of India’s Leather Industry in volume In the above charts we can see the export of leather industry is varying in both the volume and value, but in the value term it is increasing in a constant manner and volume-wise it will fluctuate in the future also.
  20. 20. 20 Gems and Jewellery Industry in India The two major segments of the GJ business in India are gold jewellery and diamond jewellery. While a predominant portion of gold jewellery manufactured in India is for domestic consumption, a predominant portion of rough, uncut diamonds processed in India in the form of either polished diamonds or finished diamond jewellery is exported. Preference for gold dominates the domestic jewellery demand. The domestic demand for gold jewellery is estimated at Rs. 390 billion in 2005, accounting for an estimated 80% of the Indian jeweler market of Rs. 490 billion. The balance comprises diamond jewellery (Rs. 80 billion), and other fabricated jewellery (Rs. 20 billion). The GJ industry has an important role in the Indian economy. While a predominant portion of gold jeweler manufactured in India is for domestic consumption, a predominant portion of rough, uncut diamonds processed in the form of either polished diamonds or finished diamond jewellery is exported. With an estimated consumption of 722 tonnes during calendar year or CY2005 (including jewellery consumption of 587 tonnes), India is the largest consumer of gold in the world. India is also estimated to hold nearly 14,000 tonnes of gold, accounting for nearly 9% of the world's cumulative mine production. Apart from its historical religious significance, gold is valued as an important savings and investment vehicle. The bulk of the Indian GJ exports comprise import of rough diamonds, cutting and polishing in India, and re-export. As per data released by the Gems & Jewellery Export Promotion Council (GJEPC), cut & polished diamonds (CPDs) accounted for 71.1% of India's GJ exports of Rs. 733 billion during FY2006, followed by gold jewellery (23.2%), rough diamonds (3.4%), and others (2.3%). Thus, two items-CPDs and gold jewellery-account for around 95% of India's GJ exports. With the increase in exports in recent years, the GJ industry has also accounted for an increased share of gross bank credit (GBC) of scheduled commercial banks (SCBs). With GBC of Rs. 198.66 billion in March 2006, the industry accounted for 3.61% of industry GBC of SCBs in March 2006, as compared with 2.7% in March 2000. Gems and Jewellery 2006 upto Sep. 2005 Year 2004 Gems and Jewellery 2003 0 5,000 10,000 15,000 20,000 US $ Million Figure 1.17 Showing the export of Gems and Jewellery in value
  21. 21. 21 Gems and Jewellery 2006 upto Sep. 2005 Year 2004 Gems and Jewellery 2003 0 50,000 100,000 150,000 200,000 Qty in thousand Figure 1.18 Showing the export of Gems and Jeweler in Volume Figure 1.16 and 1.17 shows the export of Gems and Jewellery from the FY2003, in spite of being a precious commodity its export has decline in past few years in term of volume but value is increasing in the same manner as volume is decreasing. This decrease in volume is of in these years diamond is exported maximum as compared with other stones and gold, and diamond is much costly than other stones and gold. Future growth in gold jewellery business is likely to driven by increased exports to US and other markets, and domestic consumption. Although domestic consumption has increased in 2003-05, consumption per capita is still very low, reflecting the high proportion of the rural population and the social infrastructure of the country (the rural population accounts for approximately 65-70% of domestic gold demand). Although exports of gold jewellery have increased from Rs. 52.20 billion during FY2001 to Rs. 170.15 billion during FY2006, the export business has been constrained by an inability to compete in global markets on basis of price and superior design capabilities.
  22. 22. 22 Cement Industry in India The cement industry has witnessed substantial reorganization of capacities during the last couple of years. Some examples of the consolidation witnessed during the recent past include: Gujarat Ambuja taking a stake of 14% in ACC; Gujarat Ambuja taking over DLF Cements and Modi Cement; India Cement taking over Raasi Cement and Sri Vishnu Cement; Grasim's acquisition of the cement business of L&T; Indian Rayon's cement division merging with Grasim; Grasim taking over Sri Dig Vijay Cements; L&T taking over Narmada Cements; ACC taking over IDCOL. Cement has been one of the most important areas of operations for the Indian private sector. Unlike much of heavy industry and utilities, cement was not deemed to be the exclusive preserve of the State sector in the post-independence development strategy. Cement was also the industry of choice of many corporate diversifying away from the troubled traditional areas of jute and textiles. Over the years, the share of the public sector in cement production has declined. While the private sector (large companies) accounts for around 95% of the total installed capacity, the share of public sector companies has declined from a level of 11% in FY1996 to around 4.4% in FY2006. The share in production of the public sector companies is even lower at 1.2% in FY2006 as compared to 6.5% in FY1996. The cement industry accounts for approximately 1.3% of GDP and employs over 0.14 million people. It is a significant contributor to the revenue collected by both the central and state governments through excise and sales taxes. For example, central excise collections from cement industry aggregated Rs. 45.23 billion in FY2005 and accounted for 4.3% of total excise revenue collected by the government. Cement has consistently figured among the top 5-7 commodities. It is a heavily taxed commodity and the duties amount to around 30% of the selling price of cement. India is the second largest producer of cement in the world. In 2005, India produced 142 mt of cement, accounting for 6.4% of global production of 2.22 billion tonnes. India is the second largest producer-behind China (1,000 mt), but ahead of the US (99 mt) and Japan (66 mt). India's cement industry-both installed capacity and actual production-has grown significantly over the past three decades, with production increasing at an average rate of 8.1% per year between 1981 and 2004-05. In recent years, the cement sector has accounted for a declining share of gross bank credit (GBC) of scheduled commercial banks (SCBs), largely because of decline in credit during FY2004. With GBC of Rs. 61.12 billion in March 2005, the cement industry accounted for 1.67% of industry GBC of SCBs in March 2005, as compared with 1.81% in March 2000. The Indian cement industry exported around 6 mt of cement during FY2006, accounting for around 4% of the total production. There has been a significant year on year variation in the export trend, implying that Companies rely on cement exports to balance out the domestic demand supply situation.
  23. 23. 23 Because of increased overseas demand, cement exports increased from 4.07 mt in FY2005 to 6.01 mt during FY2006. However, increased domestic demand resulted in clinker exports declining from 5.99 mt to 3.18 mt. Figure 1.19 showing the export of Cement As cement is a low value, high bulk commodity, freight cost becomes a significant factor in determining the landed cost of cement. This has resulted in a very low volume of international trade in cement. World cement trade has averaged just around 6-7% of the total production. Although, world trade in cement is limited because of high freight costs, there are countries, which either import a significant share of their total consumption or export a major share of their total production. Countries, which import a significant share of their consumption, appear to be falling in the developing world category, where the public expenditure on infrastructure projects is very high. The Middle East countries (although not falling in the developing world category) have huge requirements of cement because of construction work in projects in the oil sector. Also in these countries, unfavorable conditions (for example, inadequate cement limestone reserves) have discouraged cement capacity creation. Countries, which export a large share of their domestic production, appear to be having one thing in common. Countries with high export thrust opt for bulk transportation for exporting cement. For example, by opting for bulk transportation, Greece is in a position to export over 50% of its cement production. Bulk transportation leads to significant advantages such as savings in freight costs and packing costs, avoidance of transit loss, adulteration, pilferage, bursting of bags and damage to cement. Textile Industry in India
  24. 24. 24 The cotton textiles industry has a large importance to the economy in terms of employment, contribution to the government exchequer and foreign exchange earnings. The textiles industry accounts for around 14% of India’s industrial production, 4% of GDP, and 16% of its total merchandise exports. Besides, it provides direct employment to around 35 million people. Cotton is the most important fibre of the Indian textiles industry, accounting for around 57% of the domestic fibre consumption and 90% of its exports. Further, substantial production is from the small-scale sector, whereby the industry wealth is distributed in greater number of people. The past two decades have also witnessed a significant growth in the exports of textile goods and readymade garments from India. However, even now, India has a mere 3.3% share of the global trade of US$450 billion in textiles and clothing; the figure for India was as low as 1.8% in 1980. Exports of textiles and textiles products witnessed an acceleration during April 2005-January 2006 (10MFY2006), led by strong demand in the major markets of the US and Europe. Exports increased 22.2% (year on year or yoy) to US$13.06 billion during April 2005-January 2006. Figure 1.20 Showing the India’s Exports of Textiles and Textiles Products and Share of Total Exports The failure to provide quality value-added fabrics and garments and the near absence of contemporary designing facilities as also quota constraints are some of the major causes for India producing low value added yarns and fabrics, even as other countries have moved up the value chain. The Indian textile and clothing market is estimated to be Rs. 2.15 trillion during 2004. While the domestic market accounts for 61%, the technical textiles accounts for around 9%. The balance 30% is exported in the international market. The ratio of usage of cotton to man-made fibers/filament yarn was around 56:44 in FY2005. The manmade fiber (MMF) industry comprises fiber and filament yarn manufacturing units of cellulosic and non-cellulosic origin. The value added by manmade fibers (MMF) sector accounts for around Rs. 55 billion or 0.2% of GDP. The sector contributes excise duties of around Rs. 23 billion to the exchequer, which is around 3.5% of the total excise duties. The total assets in the sector are estimated to be around Rs.100 billion. In the last downturn, some companies were also referred to the Board of Industrial and Financial Reconstruction (BIFR). The MMF sector is also a ‘critical
  25. 25. 25 enabler’ of a large export earner—the textiles industry. Further, the downstream textiles industry also provides large-scale employment. As of end-September 2005, the employment in the cotton/MMF textile industry was 0.95 million. In the cotton dominated Indian textile industry, manmade fibres account for an around 44% share as against 50% globally. However, in FY2005, with large volumes of cotton being exported in various forms of textiles and apparel (accounting for nearly 43% of the domestic cotton production), the share of manmade fibres in the domestic textiles market stood at over 50%. Figure 1.21 Showing India’s Manmade Fibre, Yarn, Fabrics, and Madeups and Share of Total Exports Another part of textile industry is wool and man made staple fabrics which plays an important role in India’s total export Figure 1.21 shows the export of wool and man made staple fabrics. Export of Wool and Man-Made Staple Fabrics 500,000 400,000 300,000 Qty in Thousands 200,000 Wool 100,000 Man-Made Staple Fabrics 0 2003 2004 2005 2006 upto Sep. Year Figure 1.22 Showing the export of wool and man-made staples from India Iron and Steel Industry in India
  26. 26. 26 The Indian steel sector was the first core sector to be completely removed from the licensing regime as well as pricing and distribution controls. This was done primarily because of the inherent strengths and capabilities demonstrated by the Indian iron and steel industry. The growth rate in 1995-96 was a phenomenal 20%. During 1996-97, finished steel production shot up to a record 22.72 million tonnes with a growth rate of 6.2%, while in 1997-98, the finished steel production increased to 23.37 million tonnes, which was 2.8% more than the production of the preceding year. The growth rate decreased drastically in 1997-98 and 1998-99 being 2.8% and 1.9% respectively. The growth rate in 2001-2002 was 4.29% with the total production touching 31.63 million tonnes. The production of finished steel during April –December, 2002 has been 23.83 million tonnes, which is 6.3% higher than the production during the corresponding period of 2001-02. The general policy and procedures for export and import of iron and steel, ferro alloys and ferro scrap are at present decided by the Ministry of Commerce in consultation with the Ministry of Steel. In a momentous move to push exports aggressively, Government of India has announced several measures in the new Five-year Exim policy (2002-07), which is in effect from 1st April 2002. These include the removal of quantitative restrictions on exports save in respect of a few sensitive items; permission for setting up overseas banking units in Special Economic Zones (SEZ); retention of duty- neutralization instruments including Duty Entitlement Pass Book (DEPB) and other export promotion schemes. Export of Iron and Steel in the FY 2005 was decline by 0.34% as compared with last year figure 1.22 shows the following. Iron and Steel 7,000,000 Volume Qty. in thousand 6,000,000 5,000,000 4,000,000 Iron and Steel 3,000,000 2,000,000 1,000,000 0 2003 2004 2005 2006 upto Sep. Year Figure 1.23 showing the export of iron and steel from India Aluminum & Copper Industry in India
  27. 27. 27 The Indian Aluminum Industry has a moderate importance in the Indian Economy. While it has a number of applications across several sectors (such as power, automobiles, packaging, construction etc.) Its turnover is just around Rs. 120 billion (0.35% of GDP). In the trade term, export of aluminum and articles thereof aggregated Rs. 22.95 billion in FY2005, accounting for 0.6% of India’s Exports. Import aggregated Rs. 20.65billion during FY2005, accounting for 0.4% of India’s imports. India accounts for less than 3% of the global capacity for aluminum, and thus has limited influence on aluminum prices on the London Metal Exchange (LME). However, prices on the LME do have an effect on domestic prices, since, on the one hand, they determine the margin of Indian exporters and, on the other, influence the landed prices of imported metal. However the correlation is limited because of the duty a protection against imports and the low cost structure of Indian aluminum producers. Global aluminum production increased by 3.7% during 2005 to 23.4% mt. By comparison, production increased at a 3-year compound average growth rate (CAGR) of 3.4% during 2003-05, World aluminum production is expected to increase 4% during 2006, because of smelter capacity expansion in china and the Middle East. The Indian Copper Industry has a moderate importance in the Indian Economy. While it has a number of application across several sectors (such as telecom, power, construction, transportation, handicraft, Engineering, Consumer durables, defense etc.). Figure 1.23 shows the export of Aluminum and copper during the period of 2003-06. Aluminum & Copper 400,000 Volume Qty. in thousand 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 2003 2004 2005 2006 upto Sep. Year Figure 1.24 showing the export of aluminum and copper Machinery Industry in India
  28. 28. 28 The performance of heavy engineering sector is directly linked to the industry, which in turn depends on the performance of the overall economy. Industry, being the key end user, drives the performance of this sector. In the FY2002 the performance of the heavy engineering industry was affected due to an economic downswing, but sustained improved performance of the overall economy from FY2003 onwards has resulted in an upswing for this sector. The industrial performance has been even better in the FY2005 and the Index of Industrial Production is expected to increase by 7.6% this year, while the growth was 7.0% for FY2004. The revival of the economy and increase in demand has resulted in major capacity expansions to match the growing demand across all the sectors. Heavy engineering companies that serve only the domestic market are sensitive to the performance of Indian economy, while exports lead to diversification of the end-user market. Indian companies have cost-advantage in production of heavy machinery and equipment, which result in significant potential for exports. During 2001-02, heavy engineering industry was facing a recession and the Index of Production of Capital Goods witnessed a decline of 3.4%. Low levels of demand forced many of the Indian heavy engineering companies to look beyond the domestic markets. As a result, the engineering goods sector has improved its export performance and contributed to 20.37% of total exports from the country during the period April 2004 to January 2005. The export of Indian machinery industry as shown in figure 1.24. Machinery 500,000 Volume Qty. in thousand 450,000 400,000 350,000 300,000 Machinery 250,000 200,000 150,000 100,000 50,000 0 2003 2004 2005 2006 upto Sep. Year Figure 1.25 Showing export of Indian machinery industry Plastic Industry in India
  29. 29. 29 India exported nearly US$532 mn worth plastic products during FY2004 (1st half FY2005 exports US $ 295 mn). With substantial capacity additions leading to over- capacity in domestic markets during FY2001 and beyond, polymer exports have increased significantly. However, on account of lower competitiveness of the plastic products industry, polymers have been exported directly. Figure 1.26 Showing the trend in export of Plastic products Amongst various plastic products—films, plates and sheets accounted for largest share of over 40% during FY2004 (refer following figure). Plastic products for packaging (apart from films etc.) accounted for a share of 27% which includes woven sacks that accounted for 13% of the total plastic product exports. Though Indian exports of plastic products have increased over the past decade, Indian exports of plastic products, however, still continue to account for a minuscule share in
  30. 30. 30 the world trade (only around 0.47%). The low presence of the organized large-scale sector and consequently, low economies of scale prevent Indian players from becoming cost competitive in the international market.
  31. 31. 31 Organic and In-organic Chemical Industry in India Inorganic chemicals are mostly used in detergents, glass, soap, fertilizer and alkalis India’s inorganic chemicals industry is one of the fastest growing sectors, with an average growth rate of 9 per cent per annum during the last decade. Organic chemicals cover a wide range items such as methanol, formaldehyde, acetic acid, phenol, acetone etc. The organic chemicals industry in India is also concentrated mostly in western India. Export of Organic and In-Organic Che micals 6,000 5,000 4,000 Organic Chemical V alue in US $ 3,000 M illion Inorganic Chemicals 2,000 1,000 0 2003 2004 2005 2006 Ye ar Figure 1.28 is showing the export of organic and in-organic chemicals from India Export of Organic and In organic chemicals 2,000,000 1,500,000 Organic Volume Qty in 1,000,000 thousa nd In- organic Chemicals 500,000 0 2003 2004 2005 2006 Ye a r Figure 1.29 is showing the export of organic and in-organic chemicals in volume
  32. 32. 32 Fertilizers Industry in India A pesticide is any substance or mixture of substances intended for preventing, destroying, repelling, or mitigating any pest. The pesticides (of which insecticides constitute an important segment) or the agrochemicals industry (hereinafter referred to as the PAC industry) primarily consists of insecticides, herbicides and fungicides. The global market for chemical pesticides/agrochemicals was estimated at around US$26.71 billion in 2003. Herbicides comprised 44% of the world market, followed by insecticides (27%), fungicides (20%), and others (9%). The market increased by 6.2% during 2003. In the period since 1990, the world market has increased from US$23.17 billion, at an annual average of 1.1%.As shown in figure 1.26 Figure 1.30 shows the world’s market in pesticides The increased exports of pesticides in recent years is primarily because of the reduction in pesticide production in developed countries, and the shift in pesticide production from the developed countries to developing countries. India is one of the largest producers of pesticides in Asia. Total world pesticide exports from all countries increased from US$10.27 billion in 2002 to US$12.42 billion in 2003, caused by higher pesticide usage. Amongst the developing countries, India is the second-largest exporter of pesticides, behind China. India accounted for 3% of the world export of pesticides in 2003, as compared with 5.9% for China. In terms of market share of exports of various pesticide products, Indian exports of insecticides aggregated US$313 million during 2003, accounting for 10.4% of total worldwide insecticide exports of US$3,011 million. India’s share has declined from 11.4% during 2002.
  33. 33. 33 Pharmaceutical Industry in India The Indian Pharmaceutical Industry today is in the front rank of India’s science- based industries with wide ranging capabilities in the complex field of drug manufacture and technology. A highly organized sector, the Indian Pharma Industry is estimated to be worth $ 4.5 billion, growing at about 8 to 9 percent annually. It ranks very high in the third world, in terms of technology, quality and range of medicines manufactured. From simple headache pills to sophisticated antibiotics and complex cardiac compounds, almost every type of medicine is now made indigenously The Indian Pharmaceutical sector is highly fragmented with more than 20,000 registered units. It has expanded drastically in the last two decades. The leading 250 pharmaceutical companies control 70% of the market with market leader holding nearly 7% of the market share. It is an extremely fragmented market with severe price competition and government price control. The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and inventible. There are about 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). These units produce the complete range of pharmaceutical formulations, i.e., medicines ready for consumption by patients and about 350 bulk drugs, i.e., chemicals having therapeutic value and used for production of pharmaceutical formulations. Pharmaceutical Volume Qty in Thousand 4,000.00 3,500.00 3,000.00 2,500.00 2,000.00 Pharmaceutical 1,500.00 1,000.00 500.00 0.00 2003-04 2004-05 2005-06 2006 up to Sep. Year Figure 1.31 Showing the Export of Pharma Products
  34. 34. 34 Cosmetic Industry in India Many of the world’s popular cosmetics brands entered the Indian market in the 1990s as the Indian market opened up to foreign companies. The cosmetics and personal care industry has been growing at an average rate of 15-20 percent for the last few years. Growth has come mainly from the low and medium-priced categories, which account for 90 percent of the cosmetics market in terms of volume. Even though mass-market products still constitute the major portion of the India cosmetics and toiletries market, increased disposable income has led to growth in demand for premium products. The urban population in particular, with its rising purchasing power, is the main force that drives the demand for various cosmetic products in India. The reasons for the growing demand for cosmetic products in India also include: greater access to television, which has created a growing awareness of the western world; increased advertising in general; and greater product choice and availability. The success of contestants from India at various well known international beauty pageants in the last few years has also contributed to making Indian women more conscious of their appearance and more aware of western cosmetic products and brands. Also, a boom in the Indian fashion world has contributed to the rise in demand for professional beauty care products. Even with double-digit growth rates, the market penetration of cosmetics and toiletries products in India is very low. Current per capita expenditure on cosmetics is approximately $0.68 cents, as compared to $36.65 in other Asian countries. This low market penetration for cosmetics and personal care products in India can be viewed as an opportunity for more significant growth down the road in this country of 1 billion people. The current size of India’s cosmetic and toiletries market is about $950 million. The fastest growing segment is color cosmetics, accounting for around $60 million of the total market. Nail enamels and lipstick account for about round 65 percent of the color cosmetic segment. Revlon and L’Oreal dominate the small premium lipsticks and nail enamels niches. Lipstick sales account for nearly a third of the market at $21 million, while the market for nail enamels is about $23 million. Lakme, a brand originally introduced by the Tata Group of India, but now owned by Hindustan Lever (HLL) of the Unilever group, Tips & Toes, and Revlon dominate the color cosmetics market. The color cosmetics segment is very competitive and has a high penetration level, compared to other market segments. The toiletries market segment in India is well developed and dominated by multinational companies and a few large Indian companies. This segment is also characterized by high entry barriers, a high rate of new product launches, and high advertising expenditures. Bath and shower products account for the largest share of the toiletries market segment. The toiletries segment can be divided into two categories: the less price sensitive niche and highly brand conscious, premium niche. The price sensitive niche caters to the middle and lower middle class and the premium niche caters to the urban and higher class.
  35. 35. 35 Export: Cosmetic Industy 120,000 100,000 80,000 Qty in Thousand 60,000 40,000 20,000 0 2003 2004 2005 2006 2007 2008 2009 Forecasted Year Figure 1.32 Showing the export of cosmetic industry Export: Cosmetic Industry 700 600 500 Value in US $ 400 Million 300 200 100 0 2003 2004 2005 2006 2007 2008 2009 Forecasted Year Figure 1.33 showing the export of cosmetic industry in value Export of Cosmetic Industry is growing continuously in volume since FY2003, but in value it was a little shift in the FY2004 but in FY2005 it jumped and increase by $ 40 million in table d. Year Value (US$ Million) 2003 317.57 2004 296.77 2005 436.03 2006 459.34 2007 518.57 2008 599.86 2009 641.13 Table D: Showing the YoY growth in value of cosmetic industry
  36. 36. 36 Electronic Goods Industry in India The Electronics industry has emerged as the fastest growing segment of the Indian industry both in terms of production and exports. This growth has had significant economic and social impacts. Today the local and global impact of the electronics industry has been due to its modern incarnation viz., the Information Technology (IT) Industry. By definition the IT industry includes the hardware “backbone” from the electronics industry and software. The consumer durables industry appears to have two clearly differentiated segments. The MNCs have an edge over their Indian counterparts in terms of technology combined with a steady flow of capital. The domestic companies compete on the basis of their well-acknowledged brands, an extensive distribution network and an insight into local market conditions. Demand is Cyclical and seasonal. Demand is high during festive season and is generally dependent on good monsoons. Purchase necessarily is done only during the harvest, festive and wedding seasons — April to June and October to November in North India and October to February in the South. Rural India, which accounts for nearly 70% of the total number of households, offers plenty of scope and opportunities for the white goods industry. The urban consumer durable market for products including TV is growing annually by 7 to 10 % whereas the rural market is zooming ahead at around 25 % annually. Increasing consumer awareness and preference for new models have added to the demand. Products like air conditioners are no longer perceived as luxury products but are treated as necessities in the changed socio-economic environment with changed life styles. Export:Electronic Goods Industry 2009 2008 2007 Year 2006 2005 2004 2003 0 500,000 1,000,0001,500,0002,000,0002,500,0003,000,0003,500,0004,000,0004,500,000 Qty in thousand Forecasted Figure 1.34 Showing the Export of Electronic Goods Industry in volume
  37. 37. 37 Figure 1.29 shows the export of electronic industry, in last few years’ electronic goods and consumer durables industry has shown a great increase in export, because companies like Sansui, Samsung, Whirlpool, LG has set up there manufacturing plant in India and they are exporting these good from India to the neighboring countries and other western countries. This shows that this growth rate will continue due to great participation of real estate industry. Same as in table f we can see the increasing value of electronic goods industry. Table f: Showing the Export of Electronic Goods Industry in Value Year Value (US$ Million) Growth rate% 1,899.06 - 2003 2,071.68 8.33 2004 2,767.55 25.14 2005 3,114.59 11.14 2006 3,694.18 15.69 2007 4,118.73 10.31 2008 4,646.65 11.36 2009 The sectors which have recorded excellent growth rates of more than 20 per cent in terms of quantity produced are Air Conditioners (25 per cent), Split Air Conditioners (42.6 per cent) Micro Wave Woven (27.3 per cent), DVDS (25 per cent) VCD/MP3 (20per cent), Color Picture Tube (23 per cent,). The sectors which have recorded high growth rates between 18 and 28 per cent in April-March 2004-05 over the corresponding previous period are Color Television (12%), Window Air Conditioners (18.8 per cent ), Washing Machines (18.1 per cent Watch (10%), Frost Free Refrigerators (13.8%).  Some sectors which have recorded moderate growth of 0 to 10 per cent are refrigerators (5 per cent),), clock (8 per cent), Direct Cool Refrigerator (2.8 per cent).  The sector recording negative growth is B&W TV (- 16.7%), The Refrigeration Industry has reached 3.9 million units in 2004-05 from 3.7 million units in the last year with a growth of 5 per cent.  The Air-Conditioners Industry has reached at 1.2 million units during 2004-05 with a growth of 25 per cent from 9.8 lakh units in 2003-04.  Washing Machines is estimated to have grown by 18.1 per cent from 1.35 million units in 2003-04 to 1.6 million units in 2004-05.  Microwave oven has grown by 27.3 per cent growth with 3.5 lakh units compared to 2.75 lakh units in 2003-04.  The Indian Color Television industry has grown by 12.1 per cent in 2004-05 by reaching 9.25 million units in 2004-05 from 8.25 million units in 2003-04. The B&W TV has recorded a negative growth of 16.7 per cent from 3 million units in2003-04 to 2.5 million units in 2004-05.
  38. 38. 38  Watch and clock have registered growth of 10 per cent and 8 per cent from 20.6 mn units and 26.3 million units in 2003-04 to 22.6 mn units and 28.4 mn units in 2004-05. The VCD/MP3 industry has registered 20% growth and has achieved production of 8.4 million units.  The unorganized sector has occupied a major share in manufacturing and supplying VCD/MP3. DVD Players have grown by 25 per cent in 2004-05 with the volume estimated to be 625000 units.
  39. 39. 39 Findings  Major part of India’s export goes to USA followed by United Arab Emirate and China and this study shows this will also in the future as shown in figure 1.30. Export: Country-wise JAPAN ITALY BELGIUM GERMANY 2008 UK 2007 2006 HONG KONG 2005 2004 SINGAPORE CHINA UAE USA 0.00 5000.00 10000.00 15000.00 20000.00 25000.00 Figure 1.35 Showing the Export of India country-wise in Value in US $ Million  India’s Tea and Coffee industry has largest share in world’s export in its category, but then also it is losing its share during last few years and this fluctuation will also continue over the year. Tea and coffee industry depends on the monsoon and over the last few years the global warming has affected the monsoon and this may affect to the production of tea and coffee. Volume of Tea and Coffee 800,000 700,000 600,000 500,000 Qty in Thousands 400,000 300,000 200,000 100,000 0 2003 2004 2005 2006 2007 2008 2009 upto Sep. Year Figure 1.36 Showing the export of Tea and coffee industry
  40. 40. 40  Sugar Industry has seen great variation in both export and import, in India maximum sugar is produce in area of Uttar Pradesh and GOI has ban the export of sugar due to rise in price of sugar in world market and not having enough stock to meet the domestic consumption . This ban has its limitation up to march 2007, but ban does not include EU and USA.  Tobacco is grown in more than 100 countries, just four countries (Brazil, China, India and the United States) account for two-thirds of total global production and only two countries, Malawi and Zimbabwe, are significantly dependent on export earnings from tobacco.1 Out of the 141 countries that export tobacco, only 18 derive more than one percent of their total export earnings from tobacco. In only four of those 18 countries do tobacco exports account for more than five percent of total export earnings. India is second largest export of the world and holds round 6.5% of total export of tobacco of the world.  Beverage industry’s export of India is growing with the rate of 13-16% p.a. as shown in the table b. Both in the term of volume and value it is becoming the important to the Indian economy.  The export of leather industry is varying in volume, but in the value term it is increasing in a constant manner and volume-wise it will fluctuate in the future also. Export of Leather from India 300,000 250,000 200,000 Qty in thousand 150,000 100,000 50,000 0 2003 2004 2005 2006 2007 2008 2009 upto Sep. Year  Future growth in gold jewellery business is likely to driven by increased exports to US and other markets, and domestic consumption. Although domestic consumption has increased in 2003-05, consumption per capita is still very low, reflecting the high proportion of the rural population and the social infrastructure of the country (the rural population accounts for approximately 65-70% of domestic gold demand).
  41. 41. 41  As cement is a low value, high bulk commodity, freight cost becomes a significant factor in determining the landed cost of cement. This has resulted in a very low volume of international trade in cement. World cement trade has averaged just around 6-7% of the total production. Countries, which export a large share of their domestic production, appear to be having one thing in common. Countries with high export thrust opt for bulk transportation for exporting cement. For example, by opting for bulk transportation, Greece is in a position to export over 50% of its cement production. Bulk transportation leads to significant advantages such as savings in freight costs and packing costs, avoidance of transit loss, adulteration, pilferage, bursting of bags and damage to cement.  In the cotton dominated Indian textile industry, manmade fibres account for an around 44% share as against 50% globally. However, in FY2005, with large volumes of cotton being exported in various forms of textiles and apparel (accounting for nearly 43% of the domestic cotton production), the share of manmade fibers in the domestic textiles market stood at over 50%.As shown in the chart below.  Export of Iron and Steel in the FY 2005 was decline by 0.34% as compared with last year; The Indian Copper Industry has a moderate importance in the Indian Economy. While it has a number of application across several sectors (such as telecom, power, construction, transportation, handicraft, Engineering, Consumer durables, defense etc.)  Indian companies have cost-advantage in production of heavy machinery and equipment, which result in significant potential for exports. During 2001-02, heavy engineering industry was facing a recession and the Index of Production of Capital Goods witnessed a decline of 3.4%. Low levels of demand forced many of the Indian heavy engineering companies to look beyond the domestic markets. As a result, the engineering goods sector has improved its export performance and contributed to 20.37% of total exports from the country during the period April 2004 to January 2005.
  42. 42. 42  Indian exports of plastic products have increased over the past decade, Indian exports of plastic products, however, still continue to account for a minuscule share in the world trade (only around 0.47%). The low presence of the organized large-scale sector and consequently, low economies of scale prevent Indian players from becoming cost competitive in the international market.  The increased exports of pesticides in recent years is primarily because of the reduction in pesticide production in developed countries, and the shift in pesticide production from the developed countries to developing countries.  The pharmaceutical industry in India meets around 70% of the country's demand for bulk drugs, drug intermediates, pharmaceutical formulations, chemicals, tablets, capsules, orals and inventible. There are about 250 large units and about 8000 Small Scale Units, which form the core of the pharmaceutical industry in India (including 5 Central Public Sector Units). Indian Pharmaceutical industry has shown a high increase in export YoYas shown in figure 1.27.  Export of Cosmetic Industry is growing continuously in volume since FY2003, but in value it was a little shift in the FY2004 but in FY2005 it jumped and increase by $ 40 million.  Rural India, which accounts for nearly 70% of the total number of households, offers plenty of scope and opportunities for the white goods industry. The urban consumer durable market for products including TV is growing annually by 7 to 10 % whereas the rural market is zooming ahead at around 25 % annually.
  43. 43. 43 Bibliography ♦ A book on Indian Trade and Industry Classification, by Kumar and Garg. Published by BDP, Publishing year 2003 ♦ Hand book of the year 2003-2004, Reserve Bank of India, Study of Indian economy and foreign trade. ♦ http://strategis.ic.gc.ca/epic/site/imr-ri.nsf/en/gr126985e.html, www.strategis.ic.gc.ca ♦ National Stock Exchange, www.nseindia.com/members/directory/htm ♦ Bombay Stock Exchange, www.bseindia.com/directory/turnover/2003.nic ♦ www.dgft.delhi.nic.in ♦ www.indiamart.com ♦ www.jimtrade.com ♦ www.dgciskol.nic.in ♦ www.tradeinfo.com ♦ Center for Monitoring Indian Economy (CMIE), Andheri (East), Mumbai ♦ www.icra.in ♦ Balance of Payments Release of Dec. 29, 2006 and Statement 43, India’s Balance of Payments in Dollars, Monthly Bulletin, Reserve Bank of India, December 2006 and previous issues, www.rbi.org/monthlybulletin/bop ♦ Monthly Foreign Trade Statistics of India (principal commodities & countries), Imports and Exports & Re–exports, Directorate General of Commercial Intelligence & Statistics, Government of India, September 2006, www.dgcis.kol.nic
  44. 44. 44 Tables Table 1: Export of India Country-wise in US $ Million for the year 2003-2004 to 2004-2005 with there share in the total export of the country and growth rate. 2003-200 2004-200 S.No. Country %Share %Share %Growth 4 5 1 USA 11,490.11 17.9975 13,765.75 16.4788 19.81 2 U ARAB EMTS 5,125.61 8.0285 7,347.88 8.7961 43.36 3 CHINA P RP 2,955.10 4.6287 5,615.88 6.7227 90.04 4 SINGAPORE 2,124.84 3.3282 4,000.61 4.7891 88.28 5 HONG KONG 3,261.83 5.1091 3,691.82 4.4194 13.18 6 UK 3,023.27 4.7355 3,681.09 4.4066 21.76 7 GERMANY 2,544.57 3.9857 2,826.25 3.3833 11.07 8 BELGIUM 1,805.73 2.8284 2,509.71 3.0043 38.99 9 ITALY 1,729.41 2.7089 2,285.99 2.7365 32.18 10 JAPAN 1,709.30 2.6773 2,127.91 2.5473 24.49 11 FRANCE 1,280.89 2.0063 1,680.94 2.0122 31.23 12 BANGLADESH PR 1,740.75 2.7266 1,631.12 1.9526 -6.3 13 NETHERLAND 1,289.12 2.0192 1,604.86 1.9212 24.49 14 SRI LANKA DSR 1,319.20 2.0663 1,413.18 1.6917 7.12 15 SAUDI ARAB 1,123.31 1.7595 1,412.06 1.6904 25.71 16 SPAIN 1,002.59 1.5704 1,389.37 1.6632 38.58 17 INDONESIA 1,127.21 1.7656 1,332.60 1.5952 18.22 18 IRAN 918.11 1.4381 1,231.39 1.4741 34.12 19 MALAYSIA 892.77 1.3984 1,084.06 1.2977 21.43 20 KOREA RP 764.86 1.198 1,041.68 1.247 36.19 21 ISRAEL 723.98 1.134 1,005.76 1.204 38.92 22 SOUTH AFRICA 539.35 0.8448 984.04 1.178 82.45 23 THAILAND 831.69 1.3027 901.39 1.079 8.38 24 CANADA 763.2 1.1954 866.8 1.0376 13.57 25 NEPAL 669.36 1.0484 743.14 0.8896 11.02 26 TURKEY 563.34 0.8824 723.7 0.8663 28.47 27 AUSTRALIA 584.3 0.9152 720.25 0.8622 23.27 28 BRAZIL 275.62 0.4317 678.17 0.8118 146.05 29 NIGERIA 565.49 0.8858 644.68 0.7717 14 30 RUSSIA 713.76 1.118 631.26 0.7557 -11.56 31 TAIWAN 532.45 0.834 618.51 0.7404 16.16 32 VIETNAM SOC REP 410.44 0.6429 555.96 0.6655 35.46 33 SWITZERLAND 449.87 0.7046 540.89 0.6475 20.23 34 PAKISTAN IR 286.94 0.4494 521.05 0.6237 81.59 35 EGYPT A RP 367.49 0.5756 444.73 0.5324 21.02 36 KENYA 229.48 0.3594 426.64 0.5107 85.91 37 KUWAIT 319.09 0.4998 421.44 0.5045 32.07 38 PHILIPPINES 321.53 0.5036 412.23 0.4935 28.21 39 UNSPECIFIED 209.38 0.328 373.82 0.4475 78.54 40 MEXICO 264.43 0.4142 368.58 0.4412 39.39 41 COLOMBIA 95.31 0.1493 330.71 0.3959 246.97 42 SUDAN 107.38 0.1682 317.45 0.38 195.64 43 GREECE 200.04 0.3133 306.34 0.3667 53.14 44 DENMARK 241.9 0.3789 305.74 0.366 26.39

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