India s International Trade

Brief Overview:
After independence in 1947, India embarked on a program of autarky (national economic selfsufficiency) 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.

Cont..
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.

Foreign Trade Policy 2004-09

Launched on August 31, 2004. It broke the running EXIM Policy 2002-2007 in year 2004 due to the change of Government. The policy came into force on September 1, 2004 and remained effective till March 31, 2009.

Foreign Trade Policy 2004-09

OBJECTIVES: To double our percentage share of global merchandize trade within 5 years. Use trade expansion as an effective instrument of economic growth and employment generation.

Thrust Sectors
# Agricultural

# # # # #

Handicrafts Handlooms Gems and Jewellery Leather Textile

Technological Expectancies
Digital automation target #All Export transactions would be through EDI mode by 31st October, 2005; # Digital Signature and EFT facility operational

Foreign Trade Policy 2009-2014; Objectives

To arrest and reverse declining trend of exports is the main aim of policy, aim to be reviewed after 2 years To double export of goods and services from India by 2014 To double India s share in global merchandise trade Simplification of the application procedure for availing various benefits

Foreign Trade Policy 2009-2014; Objectives

To set in motion the strategies and policy measures which catalyze growth of exports To encourage exports through a mix of measures

India's Total Trade from 2007-2011 (In US dollars)

Export 1,400,000.00 1,200,000.00 1,000,000.00
620,905.02

Import

Total

800,000.00
488,991.67 467,124.31

600,000.00
312,149.29

414,786.18

400,000.00
303,696.31 251,654.00 288,372.88

369,769.13

200,000.00 0.00

185,735.24 163,132.18 185,295.36 178,751.43 251,135.89

Apr-Mar 2007

India s Merchandise Trade Turnover increased from US $312 bn in FY07 to US $620 bn in FY11(increase of 98.71%)

26,414.05

Apr-Mar 2008

Apr-Mar 2009

Apr-Mar 2010

Apr-Mar 2011

India's Total Trade from 2007-2011 (In US dollars)

Export 1,400,000.00 1,200,000.00 1,000,000.00
620,905.02

Import

Total

800,000.00
488,991.67 467,124.31

600,000.00
312,149.29

414,786.18

400,000.00
303,696.31 251,654.00 288,372.88

369,769.13

200,000.00 0.00

185,735.24 163,132.18 185,295.36 178,751.43 251,135.89

126,414.05

Apr-Mar 2007

Apr-Mar 2008

Apr-Mar 2009

Apr-Mar 2010

Apr-Mar 2011

India s Export increased from US $126 bn in FY07 to US $251 bn in FY11(increase of 99.20%)

India's Total Trade from 2007-2011 (In US dollars)

Export 1,400,000.00 1,200,000.00 1,000,000.00
620,905.02

Import

Total

800,000.00
488,991.67 467,124.31

600,000.00
312,149.29

414,786.18

400,000.00
303,696.31 251,654.00 288,372.88

369,769.13

200,000.00 0.00

185,735.24 185,295.36 178,751.43 251,135.89

126,414.05

163,132.18

Apr-Mar 2007

Apr-Mar 2008

Apr-Mar 2009

Apr-Mar 2010

Apr-Mar 2011

India s Import increased from US $ 185 bn in FY07 to US $369 bn in FY11(increase of 99.46%)

India s Exports Region Wise for FY 2011

2,863.63 3,122.15 1) Europe 50,697.40 141,022.73 16,281.18 4) Asia & ASEAN 37,148.79 5) CIS & Baltics 6) Unspecified Region 2) Africa 3) America

In US $ Millions

India s Exports Commodity Wise

In Dollars

In Rupees

India s Imports Commodity Wise

In Dollars

In Rupees

Changes in gems and jewellery Sector

Plan of establishing Diamond Bourses around the country Import of cut and polished diamonds for certification and grading has been introduced on consignment basis Personal carriage limit increased
For exhibitions US$ 5 million For samples US$ 1 million

Foreign Trade Policy 2009-2014; Changes in Agriculture Sector

To reduce transaction and handling costs, a single window system to facilitate export of perishable agricultural produce has been introduced. The system involves creation of multi-functional nodal agencies to be accredited by Agricultural and Processed Food Products, Export Development Authority.

Foreign Trade Policy 2009-2014; Changes in Leather Sector

Leather sector shall be allowed re-export of unsold imported raw hides and skins and semi finished leather from public bonded ware houses, subject to payment of 50% of the applicable export duty. Enhancement of FPS rate to 2%, would also significantly benefit the leather sector

Foreign Trade Policy 2009-2014; Changes for Export of Tea

Minimum value addition under advance authorization scheme for export of tea has been reduced from the existing 100% to 50%. DTA sale limit of instant tea by Export Oriented Unit (EOU) units has been increased from the existing 30% to 50%. Export of tea has been covered under VKGUY Scheme benefits.

Foreign Trade Policy 2009-2014; Changes in Pharmaceutical Sector

Export Obligation Period for advance authorizations issued with 6-APA as input has been increased from the existing 6 months to 36 months, as is available for other products. Pharmaceutical sector extensively covered under MLFPS for countries in Africa and Latin America; some countries in Oceania and Far East.

Foreign Trade Policy 2009-2014; Changes in Handloom Sector

To simplify claims under FPS, requirement of Handloom Mark for availing benefits under FPS has been removed.

Foreign Trade Policy 2009-2014; Changes for Export Oriented Units

EOU s can sell 90% of their production in Domestic Tariff Area EOUs will now be allowed to procure finished goods for consolidation along with their manufactured goods, subject to certain safeguards

India s major Export partners 2007-2011

40,000.00 35,000.00

30,000.00 USA 25,000.00 U ARAB EMTS CHINA P RP SINGAPORE 15,000.00 UK 10,000.00 HONG KONG

20,000.00

5,000.00

0.00 Apr-Mar 2007 Apr-Mar 2008 Apr-Mar 2009 Apr-Mar 2010 Apr-Mar 2011

India s major Import partners 2007-2011

50,000.00 45,000.00

40,000.00

35,000.00

30,000.00

CHINA P RP USA

25,000.00

SAUDI ARAB U ARAB EMTS

20,000.00

IRAN SWITZERLAND

15,000.00

10,000.00

5,000.00

0.00 Apr-Mar 2007 Apr-Mar 2008 Apr-Mar 2009 Apr-Mar 2010 Apr-Mar 2011

India s Major Export Partners

In Dollars

In Rupees

India s Major Import Partners

In Dollars

In Rupees

Conclusion
Conversion of Imports and Exports (Control) Act, 1947 to Foreign Trade Development and Regulation Act, 1992 was a remarkable change Foreign Trade Policy 2004-2009 had a good impact on India s trade Focus Market Scheme in Foreign Trade Policy 2009-2014 was an important factor.