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Karmayogi

International trade

India's share in the global trade, including trade in merchandise and services sector, has increased from 1.1 percent in 2004 to 1.5 percent in 2006 and will cross the two percent in 2009. Foreign trade, as a percentage of GDP (in rupee terms) was over 25% in 2006, up from 14.1 percent in 1990-91.

Exports:
India's chief exports include computer software, agricultural products (cashews, coffee), cotton textiles and clothing (ready-made garments, cotton yarn and textiles), gems and jewellery, cut diamonds, handicrafts, iron ore, jute products, leather goods, shrimp, tea, and tobacco. The country also exports industrial goods, such as appliances, electronic products, transport equipment, light machinery as well as chemical and engineering products. India imports rough diamonds, cuts them, and exports the finished gems. India's main exports in 2005 included USA 16.7%, UAE 8.5%, China 6.6%, Singapore 5.3%, UK 4.9%, Hong Kong 4.4%.

Total Exports by India:
Source: Indian Ministry of Commerce and Industry
 

Note:
India's exports as a percentage of GDP is set to double since 1998.
India's export growth is the second fastest in the world after China's.

Imports:
Capital goods and fuel, each account for about a quarter of Indian imports. Other imports of India include edible oils, fertilizer, food grains, iron and steel, industrial machinery, professional instruments and transportation equipment. Chemicals, precious and semi-precious stones and non-ferrous metals are the other major imports. India's main import partners included China 7.3%, US 5.6%, Switzerland 4.7%.

Total Imports by India:
Source: Indian Ministry of Commerce and Industry
 

Deficits:
The value of India's imports is greater than the value of its exports. India uses foreign loans to finance the extra imports. With exports and earnings on the invisibles account improving, the trade deficit in 2000/01 narrowed to $5.73 billion from $12.9 billion in the year-ago period. Current account deficit was about US$ 3.7 billion or about 1.4 percent of GDP in 1996-97, down from 3.2 percent in 1990-91.

Key Financial Indicators, 2006
Source: Reserve Bank of India

Note:
India's Current Account as a % of GDP was positive for the first time in 23 years.

US Trade with its major trading partners, 2002
Source: US Office of trade and Economic Analysis
(in millions of dollars)

Note: US Exports to India $4,101.1 million and imports from India worth $11,818.3 million

US Trade deficit, 1790 - 2002
Source: US Office of trade and Economic Analysis
(in millions of dollars)

The key for India is to keep increasing its share in the global trade.

Summary:
The macro economic reform policies were introduced by the Government of India  in the industrial, commercial and financial sectors. The trade policy reforms aimed at creating an environment for achieving a quick quantum jump in exports. Major changes were effected in the Exim Policy to serve this purpose. Commodity-specific as well as country-specific liberalization measures were resorted to, to promote further exports. The commerce ministry and the associated organizations were re-oriented to bring about a totally exporter-friendly climate.

- India's share in world trade has doubled from 0.4% in 1991 to 0.8% in 2003 to 1.5% in 2006 to 2% on 2009.

- India's largest trading partners are the US and EU countries, but trade with the Asia-Pacific is surging.

- More details