Foreign Trade - India

7/31/2019 Foreign Trade - India

1/43

FOREIGN TRADE

INDIA

Introduction

This project is a descriptive study of the trends in Indias foreign trade from the

period 1970-2011.

In the following pages, we have made an attempt to study, analyse, compare trends of Indias

exports and imports for the above mentioned period, the composition of exports & imports and

any change in the same thereon, direction of foreign trade to various countries and the

respective percentage changes of trade in each category of countries.

All data used during the course of work is from The Handbook of Statisticswww.rbi.org.in

Data have been divided into different, appropriate periods for the sake of comparison and

averages have been taken to give an overall view. Aggregates for commodity types not

considering the subheads, are taken in order to maintain simplicity and represent and analyse

the data in a better manner. Similarly, categories of countries and not every single one has been

accounted for. However, the break-ups for all of these have been provided, immediately

following the respective chart.

What is Foreign Trade?

Foreign trade can be considered a number of different things, depending on

the type of trade one is talking about. Generallyspeaking, foreign trade means trading goods and services that are destined

for a country other than their country of origin. Foreign trade is all about

imports and exports. The backbone of any foreign trade between nations is

those products and services which are being traded to some other location

outside a particular country's borders. Some nations are adept at producing

certain products at a cost-effective price. Perhaps it is because they have

the labor supply or abundant natural resources which make up the raw

SYBI
http://www.rbi.org.in/http://www.rbi.org.in/http://www.rbi.org.in/


2/43

FOREIGN TRADE

INDIA

materials needed. No matter what the reason, the ability of some nations to

produce what other nations want is what makes foreign trade work.

Important concepts and terms

OECD countries

The Organization for Economic Co-operation and Development (OECD) is an international

economic organization of 34 countries founded in 1961 to stimulate economic progress and

world trade. It is a forum of countries committed to democracy and the market economy,

providing a platform to compare policy experiences, seek answers to common problems,

identify good practices, and co-ordinate domestic and international policies of its members.

OPEC countries

OPEC (Organization of Petroleum Exporting Countries) is an intergovernmental

organization of 12 oil-producing countries made up of Algeria, Angola,

Ecuador,Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, the United Arab Emirates,

and Venezuela. OPEC has maintained its headquarters in Vienna since 1965 and hosts regular

meetings among the oil ministers of its Member Countries.

Economic Liberalization in India

The economic liberalization in India refers to ongoing economic reforms in India that started

on 24 July 1991. In the 1980s, Prime MinisterP. V. Narasimha Rao initiated some reforms. In

1991, after India faced abalance of payments crisis, it had to pledge 20 tons of gold to Union

Bank of Switzerland and 47 tons to Bank of England as part of a bailout deal with

the International Monetary Fund (IMF). In addition, IMF required India to undertake a series of

structural economic reforms. As a result of this requirement, the government ofP. V.

Narasimha Rao and his finance ministerManmohan Singh (the present Prime Minister of India)

started breakthrough reforms, although they did not implement many of the reforms IMF

wanted. The new neo-liberalpolicies included opening for international trade and

investment, deregulation, initiation ofprivatization, tax reforms, and inflation-controlling

measures. The main objective of the government was to transform the economic

system from socialism to capitalism so as to achieve high economic growth

SYBI
http://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/Democracyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Algeriahttp://en.wikipedia.org/wiki/Algeriahttp://en.wikipedia.org/wiki/Angolahttp://en.wikipedia.org/wiki/Ecuadorhttp://en.wikipedia.org/wiki/Iranhttp://en.wikipedia.org/wiki/Iraqhttp://en.wikipedia.org/wiki/Kuwaithttp://en.wikipedia.org/wiki/Libyahttp://en.wikipedia.org/wiki/Nigeriahttp://en.wikipedia.org/wiki/Qatarhttp://en.wikipedia.org/wiki/Saudi_Arabiahttp://en.wikipedia.org/wiki/United_Arab_Emirateshttp://en.wikipedia.org/wiki/Venezuelahttp://en.wikipedia.org/wiki/Viennahttp://en.wikipedia.org/wiki/Microeconomic_reformhttp://en.wikipedia.org/wiki/Economy_of_Indiahttp://en.wikipedia.org/wiki/P._V._Narasimha_Raohttp://en.wikipedia.org/wiki/Balance_of_paymentshttp://en.wikipedia.org/wiki/Union_Bank_of_Switzerlandhttp://en.wikipedia.org/wiki/Union_Bank_of_Switzerlandhttp://en.wikipedia.org/wiki/Bank_of_Englandhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/P._V._Narasimha_Raohttp://en.wikipedia.org/wiki/P._V._Narasimha_Raohttp://en.wikipedia.org/wiki/Manmohan_Singhhttp://en.wikipedia.org/wiki/Prime_Minister_of_Indiahttp://en.wikipedia.org/wiki/Neoliberalismhttp://en.wikipedia.org/wiki/Deregulationhttp://en.wikipedia.org/wiki/Privatizationhttp://en.wikipedia.org/wiki/Privatizationhttp://en.wikipedia.org/wiki/Economic_systemhttp://en.wikipedia.org/wiki/Economic_systemhttp://en.wikipedia.org/wiki/Socialist_economicshttp://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/International_organizationhttp://en.wikipedia.org/wiki/Democracyhttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Algeriahttp://en.wikipedia.org/wiki/Angolahttp://en.wikipedia.org/wiki/Ecuadorhttp://en.wikipedia.org/wiki/Iranhttp://en.wikipedia.org/wiki/Iraqhttp://en.wikipedia.org/wiki/Kuwaithttp://en.wikipedia.org/wiki/Libyahttp://en.wikipedia.org/wiki/Nigeriahttp://en.wikipedia.org/wiki/Qatarhttp://en.wikipedia.org/wiki/Saudi_Arabiahttp://en.wikipedia.org/wiki/United_Arab_Emirateshttp://en.wikipedia.org/wiki/Venezuelahttp://en.wikipedia.org/wiki/Viennahttp://en.wikipedia.org/wiki/Microeconomic_reformhttp://en.wikipedia.org/wiki/Economy_of_Indiahttp://en.wikipedia.org/wiki/P._V._Narasimha_Raohttp://en.wikipedia.org/wiki/Balance_of_paymentshttp://en.wikipedia.org/wiki/Union_Bank_of_Switzerlandhttp://en.wikipedia.org/wiki/Union_Bank_of_Switzerlandhttp://en.wikipedia.org/wiki/Bank_of_Englandhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/P._V._Narasimha_Raohttp://en.wikipedia.org/wiki/P._V._Narasimha_Raohttp://en.wikipedia.org/wiki/Manmohan_Singhhttp://en.wikipedia.org/wiki/Prime_Minister_of_Indiahttp://en.wikipedia.org/wiki/Neoliberalismhttp://en.wikipedia.org/wiki/Deregulationhttp://en.wikipedia.org/wiki/Privatizationhttp://en.wikipedia.org/wiki/Economic_systemhttp://en.wikipedia.org/wiki/Economic_systemhttp://en.wikipedia.org/wiki/Socialist_economics


3/43

FOREIGN TRADE

INDIA

and industrialize the nation for the well-being of Indian citizens. Today India is mainly

characterized as a market economy.

Indias Foreign Trade 1970 to 1981

The above chart represents Indias foreign trade from the financial year 1970-71 to 1980-

81.The X-axis represents the time period and the Y-axis, the amount of Rupees in crores. As

we observe, there has been a trade deficit for all years except 1972-73 & 1976-77.In 1972-73,

exports increased by 22.6% thus causing a trade surplus. Part of the explanation for increase in

exports in 1972-73 lied in certain temporary factors like credit financed export to Bangladesh.

Despite significant efforts at import liberalization, imports decreased by 32.28% which led to a

trade surplus of 68.9

SYBI
http://en.wikipedia.org/wiki/Industrializehttp://en.wikipedia.org/wiki/Market_economyhttp://en.wikipedia.org/wiki/Industrializehttp://en.wikipedia.org/wiki/Market_economy


4/43

FOREIGN TRADE

INDIA


The above chart represents Indias foreign trade from the financial year

1980-81 to 1990-91.The exports remained sluggish due to internal

constraints and an unfavorable international environment. As a result the

trade deficit during 1980-81 was Rs 5838.4 crore as against Rs 2724.2

crore in 1979-80 and a much lower figure of Rs 1084.6crore in the year

1978-79.The bulk of increase in trade deficit was on account of the rise inthe value of imports since 79-80. A major reason for this was the sharp

SYBI


5/43

FOREIGN TRADE

INDIA

escalation in oil and other prices. Nearly 60% of Indias imports accounted

for oil , fertilizer, edible oil and steel.


The above chart represents Indias foreign trade from the financial year

1990-91 to 2000-01.All the years experience a trade deficit. However, the

trade balance in the year 1993-94 was only Rs.3349.9 crore. This was the

fruit of the initial array of reforms. Also The Export-Import Policy announced

on April 1, 1993 provided a greater thrust to exports from agriculture and

SYBI


6/43

FOREIGN TRADE

INDIA

labour-intensive sectors. However, the graph also shows the highest trade

balance in the year 1999-2000 of Rs.55675.1 crore.


SYBI


7/43

FOREIGN TRADE

INDIA

The above chart represents Indias foreign trade from the financial year 2000-2001 to 2010

-2011. The chart shows increases in exports, imports as well as trade balances. The decade

begins with a trade deficit of Rs.27302 crore. Also, we see, the quantum of trade increasing

drastically from 2007 onwards with the highest trade deficit of Rs.533681 crore in the financialyear 2008-09. The gap between exports & imports (trade balance) has been more than ever in

last 3 to 4 years. The chart ends with a trade deficit of Rs.447840 crore in2010-11.

SYBI


8/43

FOREIGN TRADE

INDIA

The above chart represents the proportions of various commodities to the total exports of India

for the period 1970-80 (average of 11 years taken). As the pie-chart shows, manufactured

goods contribute a good part of the total exports i.e.1471.5 which is 39% of the total exports.

This is followed by food and live animals whose contribution is 27% after which comes

miscellaneous manufactured articles.

SYBI


9/43

FOREIGN TRADE

INDIA

The above chart represents the various proportions of different commodities in the total

exports of India for the 7 year period from 1980-87 (average of 7 years taken).There is not

much change in the proportions, manufactured goods contributing most (33%)followed by

food and live animals and miscellaneous manufactured articles. The total exports on an average

for the 7 year period was Rs.9740 crore.

SYBI


10/43

FOREIGN TRADE

INDIA

The above chart represents the proportions of various commodities in Indias total exports for

the 12 year period 1987-1999 (average of 12 years taken).Textile and Textile Products form a

good part of the total exports (27%).The next highest share is that of agricultural products

(20%) followed by gems and jewellery (17%) and then engineering goods (15%).The total

exports is Rs.70108 crore. An important note here is the change in the composition of exports

from the earlier periods (1970-87).

SYBI


11/43

FOREIGN TRADE

INDIA

The above chart represents the proportions of various commodities in the total exports of India

for the 12 year period 1999-2011 (average taken). Engineering goods form the highest share inthe total exports of 23% which is more than a lakh crore of rupees from the total of about 5

lakh crores. Textiles also contribute well to the total exports (16%).Chemical and petroleum

products form a share of 13% each in the total exports. A positive change in the composition of

exports as compared to the earlier decades is that not one commodity accounts for a major

share in the total exports (eg. manufactured goods in 70s or textiles in 90s), but there is a

balanced mix of various commodities claiming good share in the total exports.

TABLE 130 (b) : EXPORTS OF PRINCIPAL COMMODITIES RUPEES

I) Primary Products

SYBI


12/43

FOREIGN TRADE

INDIA

I A) Agriculture and Allied Products

1) . Tea

2) Coffee

3) Rice

4) Wheat

5) Cotton Raw including Waste

6) Tobacco

7) Cashew including Cashew Nut Shell Liquid

8) Spices

9) Oil Meals

10) Fruits and Vegetables

11) Processed Fruits, Juices, Miscellaneous Processed Items

12) Marine Products

13)Sugar and Molasses

14) Meat and Meat Preparations

15) Other Agriculture and Allied Products

B) Ores and Minerals

1) Iron Ore

2) Mica

3) Other Ores and Minerals

II Manufactured Goods

1) A Leather and Manufactures

2) Chemicals and Related Products

3) Basic Chemicals, Pharmaceuticals & Cosmetics

4) Plastic and Linoleum Products

5) Rubber, Glass, Paints, Enamels and Products

6) Residual Chemicals and Allied Products

SYBI


13/43

FOREIGN TRADE

INDIA

II CEngineering Goods

1) Iron & Steel

2) Manufacture of Metals

3) Machinery and Instruments

4) Transport Equipment

5) Electronic Goods

6) Other Engineering Goods

II D Textile and Textile Products

1) Cotton Yarn, Fabrics, Made-up, etc

2) Natural Silk Yarn, Fabrics, Made-up, etc.,incl. Silk Waste

3) Manmade Yarn, Fabrics, Made-up, etc

4) Manmade Staple Fiber

5) Woolen Yarn, Fabrics, Made-up, etc

6) Readymade Garments

7) Jute & Jute Manufactures

8) Coir & Coir Manufactures

9) Carpets

10) Carpet Handmade

11)Carpet Mill made

12) Silk Carpets

II E)Gems and Jewellery

II F) Handicrafts (excluding Handmade Carpets)

II G) Other Manufactured Goods

III Petroleum Products

IV Others (All Commodities)

SYBI


14/43

FOREIGN TRADE

INDIA

The above chart represents the proportions of various commodities in Indias total imports for

the 12 year period 1987-1999 (average of 12 years taken).As clearly shown by the above chart,

the major chunk of Indias imports is that of Petroleum and Crude products. They form 35% of

the total imports of the country. Following Petroleum and Crude products, next in line are

Capital goods constituting 25% of total imports.

SYBI


15/43

FOREIGN TRADE

INDIA

The above chart represents the proportions of various commodities in Indias total imports for

the 12 year period 1999-2011 (average of 12 years taken).The composition of Indias imports

havent changed much compared to the 12 year period 1987-1999, with Petroleum and Crudeproducts still contributing the most to the total imports. They form a good 33% of the total

imports which is more than a lakh of crores of Rupees. The second highest amount of imports

is contributed by two-Capital goods and Others with each category forming quarter on the

total Indian exports. Thus, the composition of Indias imports has more or less remained the

same throughout.

SYBI


16/43

FOREIGN TRADE

INDIA

TABLE 132 (b) : IMPORTS OF PRINCIPAL COMMODITIES RUPEES

I Bulk Imports

I.A Petroleum, Crude and Products

I.B Bulk Consumption Goods

1. Cereals and Cereal Preparations

2. Edible Oils

3. Pulses

4. Sugar

I.C Other Bulk Items

1. Fertilizers

1 (a) Crude

1 (b) Sulphur and Unroasted Iron Pyrites

1 (c) Manufactured

2. Non-Ferrous Metals

3. Paper, Paper Boards, Manufactures including News Prints

4. Crude Rubber, including Synthetic and Reclaimed

5. Pulp and Waste Paper

6. Metalliferrous Ores, Metal Scrap, etc

7. Iron and Steel

II. Non-Bulk Imports

II.A Capital Goods

1. Manufactures of Metals

2. Machine Tools

3. Machinery except Electrical and Electronic

4. Electrical Machinery except Electronic

5. Electronic Goods

6. Computer Goods

SYBI


17/43

FOREIGN TRADE

INDIA

7. Transport Equipment

8. Project Goods

II.B Mainly Export Related Items

1. Pearls, Precious and Semi-Precious Stones

2. Organic and Inorganic Chemicals

3. Textile Yarn, Fabrics, Made-Ups, etc

4. Cashew Nuts

II.C Others

1. Gold and Silver

1 (b) Silver

2. Artificial Resins and Plastic Materials, etc

3. Professional, Scientific Controlling Instruments, Photographic Optical Goods

4. Coal, Coke and Briquettes, etc

5. Medicinal and Pharmaceutical Product

6. Chemical Materials and Products

7. Non-Metallic Mineral Manufactures

8. Others

SYBI


18/43

FOREIGN TRADE

INDIA

Invisibles Trade

SYBI


19/43

FOREIGN TRADE

INDIA

The above chart represents Indias foreign trade in invisibles. Data from 1987-2011 has been

divided into four 6 year periods as follows: 1987-1993 (referred to as Period 1 hereon), 1993-

1999 (Period 2), 1999-2005 (Period 3) and 2005-2011 (Period 4). The above line graph shows

trends of the various categories of invisibles. A glance at the graph shows clear comparisonbetween the four above-mentioned periods with respect to the net amount of each category.

Period 1:

The net amount of all categories of invisibles in Period 1 lies in the same range.

Period 2:

In Period 2, the net of income decreases to 11948.Net Private Transfers increase to

33595.Official transfers remain in the same range while net Invisibles increase to 26205.

Period 3:

Period 3 sees great changes with net Private Transfers reaching 75945 and Invisibles reaching

87144.Not much change in net Income and net Official transfers are seen.

Period 4:

Period 4 witnesses the greatest changes in net non-factor services, private transfers &

invisibles. Their respective amounts are: 171204, 184016 & 319688. The net income decreases

to 36420. Net official transfers remain in the same range.

SYBI


20/43

FOREIGN TRADE

INDIA

TABLE 145: INVISIBLES BY CATEGORY OF TRANSACTIONS RUPEES

I.A) Non-factor Services, Net (I.A.1 to I.A.5)

I.B) Non-factor Services, Receipts (I.B.1 to I.B.5)

I.C) Non-factor Services, Payments (I.C.1 to I.C.5)

I.A.1) Travel, Net

I.B.1) Travel, Receipts

I.C.1) Travel, Payments

I.A.2) Transportation, Net

I.B.2) Transportation, Receipts

I.C.2) Transportation, Payments

I.A.3) Insurance, Net

I.B.3) Insurance, Receipts

I.C.3) Insurance, Payments

I.A.4) G.n.i.e., Net

I.B.4) G.n.i.e., Receipts

I.C.4) G.n.i.e., Payments

I.A.5) Miscellaneous, Net

I.B.5) Miscellaneous, Receipts

I.C.5) Miscellaneous, Payments

II.Income, Net

II.Income, Receipts

II.Income, Payments

II.A.1.Investment Income, Net

II.A.1.Investment Income, Receipts

II.A.1.Investment Income, Payments

II.A.2.Compensation of Employees, Net

II.A.2.Compensation of Employees, Receipts

SYBI


21/43

FOREIGN TRADE

INDIA

II.A.2.Compensation of Employees, Payments

III.Private Transfers, Net

III.Private Transfers, Receipts

III.Private Transfers, Payments

IV.Official Transfers, Net

IV.Official Transfers, Receipts

IV.Official Transfers, Payments

V.Invisibles, Net (I to IV)

V.Invisibles, Receipts (I to IV)

V.Invisibles, Payments (I to IV)

Direction of Foreign Trade

SYBI


22/43

FOREIGN TRADE

INDIA

The above chart represents Indias foreign trade with OECD countries. The time period is

divided into three 8-year periods namely, 1987-1995(referred hereon as Period 1), 1995-

2003(Period 2) and 2003-2011(Period 3).The increase in exports from Period 1 to Period 2 is

252% and the corresponding figure for imports is 211%. Thus we see, both exports & imports

have grown consistently. Comparing period 3 to Period 2, exports have increased by 183% and

imports, by 267%. Thus, exports have not increased as much as the imports have.

SYBI


23/43

FOREIGN TRADE

INDIA

The above chart represents Indias foreign trade with OPEC countries. The time period is

divided into three 8-year periods namely,1987-1995(referred hereon as Period 1) , 1995-

2003(Period 2) and 2003-2011(Period 3).Considering exports, there has been an tremendous

increase by 391% from Period 1 to Period 2 with only a modest increase in the imports (relative

to the exports) by 195% . Further, from Period 2 to Period 3 exports increase by 567%.The

corresponding increase in imports is 827%. Such huge jumps in this period arise due to the

Liberalization policies in early 90s.

SYBI


24/43

FOREIGN TRADE

INDIA

The above chart represents Indias foreign trade with Eastern European countries. The timeperiod is divided into three 8-year periods namely, 1987-1995(referred hereon as Period 1),

1995-2003(Period 2) and 2003-2011(Period 3).Comparing Period 2 to Period 1, exports have

increased by only 34% whereas imports have gone up by 84%. Further comparing Period 3 to

Period 2, exports have increased by 69% and imports take a huge jump by 333%.Thus,trade

with Eastern Europe has increased in the last decade with imports in the period 2003-2011

averaging to Rs.19,231 crores .

SYBI


25/43

FOREIGN TRADE

INDIA

The above chart represents Indias foreign trade with developing countries. The time period is

divided into three 8-year periods namely,1987-1995(referred hereon as Period 1) , 1995-

2003(Period 2) and 2003-2011(Period 3).There has been a surge in exports in Period 2 from

Period 1 measuring an increase as much as 421%.The corresponding imports has been 384%.

Comparing Period 3 to Period 2, we see imports increasing by 416% which again, is a huge rise

whereas the imports by the same comparison increased by 598%. There has been a remarkable

increase in the quantum of trade with Developing countries.

SYBI


26/43

FOREIGN TRADE

INDIA

The above chart represents Indias foreign trade with African countries. The time period is

divided into three 8-year periods namely, 1987-1995(referred hereon as Period 1), 1995-

2003(Period 2) and 2003-2011(Period 3). Studying the trends in exports over the three periods,

we find increases in exports by 557% from Period 1 to Period 2, 422% from Period 2 to Period

3. Following the same for imports, increases are: 514% from Period 1 to Period 2 and 271%

from Period 2 to Period 3. Thus, exports have improved considerably while imports not

increasing as much.

SYBI


27/43

FOREIGN TRADE

INDIA

The above chart represents Indias foreign trade with Latin American countries. The time

period is divided into three 8-year periods namely, 1987-1995(referred hereon as Period 1) ,

1995-2003(Period 2) and 2003-2011(Period 3). Studying the trends in exports over the three

periods, we find increases in exports by 698% from Period 1 to Period 2, 554% from Period 2

to Period 3. Following the same for imports, increases are: 231% from Period 1 to Period 2

and 562% from Period 2 to Period.

SYBI


28/43

FOREIGN TRADE

INDIA

The Direction of Foreign Trade

The OPEC countries include the following:-

1) Indonesia

2) Iraq

3) Iran

4) Kuwait

5) U.A.E.

6) Saudi Arabia

Eastern European countries includes:-

1) Romania

2) Russia

Developing countries includes:-

1) SAARC

2) Afghanistan

3) Bangladesh

4) Bhutan

5) Maldives

6) Nepal

7) Pakistan

8) Sri Lanka

9) China

10) Hong Kong

11) South Korea

12) Malaysia

13) Singapore

14) Thailand

SYBI


29/43

FOREIGN TRADE

INDIA

All African countries include:-

1) Benin

2) Egypt

3) Kenya

4) South Africa

5) Sudan

6) Tanzania

7) Zambia

8) Other Latin American countries

9) Others/unspecified

A) Export of principal commodities

Food and live animals:-

1) Fish and fish preparation

2) Cereals and cereals preparations

3) Fruits and vegetables

4) Cashew kernel

Others

1) Coffee

2) Tea

3) Spices

4) Pepper black

5) Others

6) Feeding stuffs for animals

7) Sugar & honey

8) Others

Beverages & tobacco

SYBI


30/43

FOREIGN TRADE

INDIA

1) Tobacco unmanufactured

2) Others

Crude materials inedible except fuels

1) Hides skin &fur skin Raw

2) Wool & other animal hair

3) Cotton textile fiber & waste

4) Jute textile fiber & waste

5) Mica

6) Iron ore & concentrates

7) Manganese ore

8) Lac

9) Others

Minerals fuels lubricants & related materials

1) Petroleum crude & partly refined

2) Petroleum products

3) Others

Animal & vegetable oils & fats

1) Fixed vegetables oils & fats

2) Others

Chemicals

1) Chemical elements & compounds

2) Dyeing tanning & coloring materials

3) Medical & pharmaceutical products

4) Essential oils & perfume material

5) Plastic Materials Regenerated Cellulose and Artificial Re

6) Others

SYBI


31/43

FOREIGN TRADE

INDIA

Manufactured Goods Classified Chiefly by Material

1) Leather and Manufactures & Dressed Fur Skins

2) Cotton Manufactures Excluding Yarn and Thread & Clothing

3) Textile Yarn and Thread

4) Jute Manufactures Excluding Twist and Yarn

5) Woolen Carpets and Rugs

6) Pearls precious and Semi-Precious Stones

7) Manufacture of Metals

8) Iron and Steel

9) Non-Ferrous metals

10) Others

Machinery and Transport Equipment

1) Machinery Other than Electric

2) Electrical Machinery Apparatus & Appliance

3) Transport Equipment

Miscellaneous Manufactured Articles

1) Footwear

2) Clothing

3) Others

4) Commodities and Transactions

SYBI


32/43

FOREIGN TRADE

INDIA

WORLD TRADE ORGANISATION

What is the WTO?

The World Trade Organization (WTO) is the only global international organization dealing

with the rules of trade between nations. At its heart are the WTO agreements, negotiated and

signed by the bulk of the worlds trading nations and ratified in their parliaments. The goal is to

help producers of goods and services, exporters, and importers conduct their business.

The WTO was born out of negotiations, and everything the WTO does is the result of

negotiations. The bulk of the WTOs current work comes from the 198694 negotiations called

the Uruguay Round and earlier negotiations under the General Agreement on Tariffs and Trade

(GATT). The WTO is currently the host to new negotiations, under the Doha Development

Agenda launched in 2001.

Where countries have faced trade barriers and wanted them lowered, the negotiations have

helped to open markets for trade. But the WTO is not just about opening markets, and in some

circumstances its rules support maintaining trade barriers for example, to protect consumers

or prevent the spread of disease.

At its heart are the WTO agreements, negotiated and signed by the bulk of the worlds trading

nations. These documents provide the legal ground rules for international commerce. They are

essentially contracts, binding governments to keep their trade policies within agreed limits.

Although negotiated and signed by governments, the goal is to help producers of goods and

services, exporters, and importers conduct their business, while allowing governments to meet

social and environmental objectives.

The systems overriding purpose is to help trade flow as freely as possible so long as there

are no undesirable side effects because this is important for economic development and

SYBI


33/43

FOREIGN TRADE

INDIA

well-being. That partly means removing obstacles. It also means ensuring that individuals,

companies and governments know what the trade rules are around the world, and giving them

the confidence that there will be no sudden changes of policy. In other words, the rules have to

be transparent and predictable.

The WTO is run by its member governments. All major decisions are made by the membership

as a whole, either by ministers (who usually meet at least once every two years) or by their

ambassadors or delegates (who meet regularly in Geneva).

While the WTO is driven by its member states, it could not function without its Secretariat to

coordinate the activities. The Secretariat employs over 600 staff, and its experts lawyers,

economists, statisticians and communications experts assist WTO members on a daily basis

to ensure, among other things, that negotiations progress smoothly, and that the rules of

international trade are correctly applied and enforced.

Role of EXIM bank in Indias foreign tradeExport-Import Bank of India is the premier export finance institution of the country, set

up in 1982 under the Export-Import Bank of India Act 1981. Government of India

launched the institution with a mandate, not just to enhance exports from India, but to

integrate the countrys foreign trade and investment with the overall economic growth.

Since its inception, Exim Bank of India has been both a catalyst and a key player in the

promotion of cross border trade and investment. Commencing operations as a purveyor

of export credit, like other Export Credit Agencies in the world, Exim Bank of India has,

over the period, evolved into an institution that plays a major role in partnering Indian

industries, particularly the Small and Medium Enterprises, in their globalisation efforts,

through a wide range of products and services offered at all stages of the business cycle,

starting from import of technology and export product development to export production,

export marketing, pre-shipment and post-shipment and overseas investment.

SYBI


34/43

FOREIGN TRADE

INDIA

Conclusion

In hindsight of this project work, a fair idea on the foreign trade over the period of 1970-2011

has been obtained. As far as the quantum of trade is concerned, India has come a long way

from exporting only 1,535 crores in 1970-71 to 11,57,475 crores in 2010-11. Imports too

follow similar trends. Despite this achievement, the supreme issue of trade deficit has persisted.

Huge amounts of trade deficits, leaving scars on our Balance of Payments, have nagged ourministers and the government for what seems an eternity. Figures show their failure in

implementing remedial measures for healing this deficit. One major source of this problem, as

observed in the course of our work, is the enormous amounts of imports of Petroleum and

Crude products. For resolving this, efforts have to be made in tapping our own oil resources

and thus becoming self-sufficient in oil production. Attempts for the same have already begun.

In conclusion, our only hope, on studying the present scenario is that, in years to come, we, as a

country may courageously strive to resolve this issue of trade deficit using appropriate

measures and policies, and thus bring about equilibrium in our international trade.

SYBI


35/43

FOREIGN TRADE

INDIA

SYBI

Year Exports Imports Trade Balance

1970-71 1535.3 1634.2 -99

1971-72 1608.2 1824.5 -216.4

1972-73 1971.5 1867.4 104

1973-74 2523.4 2955.4 -432

1974-75 3328.8 4518.8 -1190

1975-76 4036.3 5264.8 -1228.5

1976-77 5142.7 5073.8 68.9

1977-78 5407.9 6020.2 -612.4

1978-79 5726.1 6810.6 -1084.6

1979-80 6418.4 9142.6 -2724.2

1980-81 6710.7 12549.2 -5838.4

Year Exports Imports Trade Balance

1980-81 6710.7 12549.2 -5838.4

1981-82 7805.9 13607.6 -5801.7

1982-83 8803.4 14292.7 -5489.4

1983-84 9770.7 15831.5 -6060.8

1984-85 11743.7 17134.2 -5390.5

1985-86 10894.6 19657.7 -8763.1

1986-87 12452 20095.8 -7643.8

1987-88 15673.7 22243.7 -6570.1

1988-89 20231.5 28235.2 -8003.7

1989-90 27658.4 35328.4 -7669.9


36/43


37/43

FOREIGN TRADE

INDIA

SYBI


38/43

FOREIGN TRADE

INDIA

SYBI

Year/ Commodity

1970-1980

Year/ Commodity

1980-1987

Food and LiveAnimals

1033.6

Food and LiveAnimals

2189.33

Beverages andTobacco

84.7

Beverages andTobacco

191.7

Crude MaterialsInedible Except Fuels

435.6

Crude MaterialsInedible Except Fuels

943,33

Mineral FuelsLubricants and

Related Materials

23

Mineral FuelsLubricants and

Related Materials

854.09

Animal and VegetableOils and fats

29.3

Animal and VegetableOils and fats

36.04

Chemicals

97.4

Chemicals

378.6

Manufactured GoodsClassified Chiefly byMaterial

1471.5

Manufactured GoodsClassified Chiefly byMaterial

3192.76

Machinery andTransport Equipment

232.7

Machinery andTransport Equipment

638.91MiscellaneousManufactured Articles

349.1

MiscellaneousManufactured Articles

1287.23

Commodities andTransactions.

13

Commodities andTransactions.

28.19

Total Exports

3769.9

Total Exports

9740.14


39/43

FOREIGN TRADE

INDIA

SYBI

Year/ Commodity 1987-1999 Year/ Commodity 1999-2011

Agriculture and AlliedProducts 12544.27

Agriculture and AlliedProducts 53252.39

Ores and Minerals 2395.33 Ores and Minerals 23322.38

Chemicals and RelatedProducts 7820.9

Chemicals and RelatedProducts 65489.16

Engineering Goods 9484.6 Engineering Goods 113180.1

Textile and TextileProducts 17672.98

Textile and TextileProducts 70050.49

Gems and Jewellery 11103.06 Gems and Jewellery 77290

Handicrafts (excludingHandmade Carpets) 1034.98

Handicrafts (excludingHandmade Carpets) 2159.71

Other ManufacturedGoods 496.2

Other ManufacturedGoods 4347.14

Petroleum Products 910.75 Petroleum Products 64700.85

Others (All Commodities) 764.88 Others (All Commodities) 16200.13

Total 70108 Total 501985

Year/ Commodity 1999-2011 Year/ Commodity 1987-1999

Petroleum, Crude andProducts

108555 Petroleum, Crude andProducts

192038

Bulk ConsumptionGoods

9625.72 Bulk ConsumptionGoods

14508.09

Capital Goods 79763.69 Capital Goods 129966.56

Mainly Export RelatedItems

44590.89 Mainly Export RelatedItems

71458.78

Others 80690.22 Others 133519.7

Total Imports/AllCommodities 360529

Total Imports/AllCommodities 631846.88


40/43

FOREIGN TRADE

INDIA

SYBI


41/43

FOREIGN TRADE

INDIA

SYBI

1

INTRODUCTION

2 IMPORTANT CONCEPTS & TERMS

3 INDIA EXPORTS, IMPORTS, TRADE BALANCES

4 EXPORT OF PRINCIPAL COMMODITIES

5 IMPORT OF PRINCIPAL COMMODITIES

6 EXPORT & IMPORT OF INVISIBLES

7 DIRECTION OF FOREIGN TRADE

8 CONCLUSION


42/43

FOREIGN TRADE

INDIA

INDIA - FOREIGN

TRADE

SYBI


43/43

FOREIGN TRADE

INDIA

Work by:

Thripthi acharya 1

Shilpa Bhagat -6

Albina Chettiar -7

Prajesh Nair -30

Amruta Sawant -37

Documents

Foreign Trade - India