Foreign trade of India

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Foreign trade in India includes all imports and exports to and from India. At the level of Central Government it is administered by the Ministry of Commerce and Industry.[1] Foreign trade accounted for 48.8% of India's GDP in 2018.[2]

History[]

See also: Indo-Roman trade relations

Even before independence, the Government of India maintained semi-autonomous diplomatic relations. It had colonies (such as the Aden Settlement), who sent and received full missions,[3] and was a founder member of both the League of Nations[4] and the United Nations.[5] After India gained independence from the United Kingdom in 1947, it soon joined the Commonwealth of Nations and strongly supported independence movements in other colonies, like the Indonesian National Revolution.[6] The partition and various territorial disputes, particularly that over Kashmir, would strain its relations with Pakistan for years to come. During the Cold War, India adopted a foreign policy of non-alignment policy itself with any major power bloc. However, India developed close ties with the Soviet Union and received extensive military support from it.

Around 100CE[]

The Periplus of the Erythraean Sea is a document written by an anonymous sailor from Alexandria about 100CE describing trade between countries, including India.

Around 1500[]

In 1498 Portuguese explorer Vasco da Gama landed in Calicut (modern day Kozhikode in Kerala) as the first European to ever sail to India. The tremendous profit made during this trip made the Portuguese eager for more trade with India and attracted other European navigators and tradesmen.[7]

Pedro Álvares Cabral left for India in 1500 and established Portuguese trading posts at Calicut and Cochin (modern day Kochi), returning to Portugal in 1501 with pepper, ginger, cinnamon, cardamom, nutmeg, mace, and cloves. The profits made from this trip were huge.[8]

1991 economic reform[]

Prior to the 1991 economic liberalisation, India was a closed economy due to the average tariffs exceeding 200 percent and the extensive quantitative restrictions on imports. Foreign investment was strictly restricted to only allow Indian ownership of businesses. Since the liberalisation, India's economy has improved mainly due to increased foreign trade.[9]

Trade in services[]

India was the eighth largest exporter of commercial services in the world in 2016, accounting for 3.4% of global trade in services. India recorded a 5.7% growth in services trade in 2016–17.[10]

Exports and imports[]

Main article: List of exports of India

India exports approximately 7500 commodities to about 190 countries, and imports around 6000 commodities from 140 countries.[11] India exported US$318.2 billion and imported $462.9 billion worth of commodities in 2014.[12][13]

The Government of India's Economic Survey 2017–18 noted that five states — Maharashtra, Gujarat, Karnataka, Tamil Nadu and Telangana — accounted for 70% of India's total exports. It was the first time that the survey included international export data for states. The survey found a high correlation between a state's Gross State Domestic Product (GSDP) per capita and its share of total exports. With a high GSDP per capita but low export share, Kerala was the only major outlier because the state's GSDP per capita was heavily influenced by remittances.[14]

The survey also found that the largest firms in India contributed to a smaller percentage of exports when compared to countries like Brazil, Germany, Mexico, and the United States. The top 1% of India's companies accounted for 38% of total exports.[14]

The provisional data for March exports, released by the Ministry of Commerce at the end of April, reveals a grim situation. As per the data, India’s exports during March 2020 accounted for a little over $21.4 billion, despite a promising performance in just the previous month. This fall of approximately 35% year-on-year, as compared to March 2019 ($32.72 billion), is touching a multi-year low, and the figures are bound to fall further. A key thing to note is that exports have fallen across almost all of the commodity groups. Some commodities have registered a decline by over 30-40%, particularly engineering goods, textiles, meat, cereals, plastics and chemicals, which have been the major growth drivers of exports in recent years. As an immediate aftermath of the spread of the COVID-19 pandemic to multiple countries, global demand has fallen significantly and many orders have been cancelled. Further, the disruption of supply chains due to the ongoing lockdown has aggravated the poor performance of Indian exports -- and the situation is likely to worsen in the coming months, before recovery starts. India's electrical machinery and equipment has 40 per cent dependence on imports from China. However this number has reduced from 59.5 per cent in FY18 to 40 per cent in FY19. Although India has increased production of low-end electronic components. Import dependency on China is its major limitation. The automobile sector, which accounts for 7.5 per cent of India's GDP and a massive 49 per cent of the manufacturing GDP, is already facing slowdown. The coronavirus lockdown has made the situation worse for the auto sector as 10 to 30 per cent of automotive components are supplied from China. If factories do not resume activity in China, it could adversely affect the sector.

Trade statistics[]

Summary table of recent India foreign trade (in billion $):[15][16] [17]

Year Export Import Trade Deficit
1999 36.3 50.2 -13.9
2000 43.1 60.8 -17.7
2001 42.5 54.5 -12.0
2002 44.5 53.8 -9.3
2003 48.3 61.6 -13.3
2004 57.24 74.15 -16.91
2005 69.18 89.33 -20.15
2006 76.23 113.1 -36.87
2007 112.0 100.9 11.1
2008 176.4 305.5 -129.1
2009 168.2 274.3 -106.1
2010 201.1 327.0 -125.9
2011 299.4 461.4 -162.0
2012 298.4 500.4 -202.0
2013 313.2 467.5 -154.3
2014 318.2 462.9 -144.7
2015[18] 310.3 447.9 -137.6
2016 262.3 381 -118.7
2017 275.8 384.3 -108.5
2018 303.52 465.58 -162.05
2019 330.07 514.07 -184
2020 314.31 467.19 -152.88

The top 10 commodity exports in 2007 were as follows:

Rank Commodity HS Code Value (US$ billion) Share (%)
1 Refined Petroleum 27 61.2 19.2
2 Gems, precious metals, coins 71 41.2 13
3 Vehicles 87 14.5 4.6
4 Machines, engines, pumps 85 13.6 4.3
5 Organic chemicals 29 12.1 3.8
6 Pharmaceuticals 30 11.7 3.7
7 Cereals 10 10.1 3.2
8 Iron and steel 72 9.1 2.9
9 Clothing (not knit or crotchet) 58 9.1 2.9
10 Electronics 85 9.1 2.8

The top 10 commodity imports in 2007 were as follows:

Rank Commodity HS Code Value (US$ billion) Share (%)
1 Oil 27 177.5 38.3
2 Gems, precious metals, coins 71 60 13
3 Electronics 85 32 6.9
4 Machines, engines, pumps 85 31.2 6.7
5 Organic chemicals 29 18.3 4
6 Plastics 39 11.8 2.6
7 Iron and steel 72 11.4 2.5
8 Animal/vegetable fats and oils 15 10.7 2.3
9 Ores, slag and ash 26 7.4 1.6
10 Medical and technical equipment 90 7.1 1.5

Trading partners of India[]

Further information: List of the largest trading partners of India

India's largest trading partners in order of value of total trade are Bangladesh, Bhutan, Germany, Hong Kong, Iraq, Israel, Japan, Nepal, Russia, Saudi Arabia, China, Singapore, Switzerland, the United Arab Emirates and the United States. India is biggest exporter of pharmaceuticals, some food products and is a mixed economy.

See also[]

References[]

  1. ^ "Country comparison: Exports". The World Factbook. Central Intelligence Agency. Retrieved 5 June 2017.
  2. ^ "Human Development Report 2018" (PDF). narendhar. Retrieved 21 March 2017.[permanent dead link]
  3. ^ High Commission of India in Australia: India Australia Relations Archived 13 October 2009 at the Wayback Machine. Hcindia-au.org (20 April 2011). Retrieved 12 November 2011.
  4. ^ First Assembly, Geneva, 15 November – 18 December 1920. Indiana.edu (18 December 1920). Retrieved 12 November 2011.
  5. ^ UN list of members by admission Archived 12 July 2014 at the Wayback Machine. Un.org. Retrieved 12 November 2011.
  6. ^ [1][dead link]
  7. ^ John, K. C.; Kevin, S (2004). Traditional Exports of India: Performance and Prospects. Delhi: New Century Publications. p. 59. ISBN 81-7708-062-8.
  8. ^ John, K. C.; Kevin, S (2004). Traditional Exports of India: Performance and Prospects. Delhi: New Century Publications. p. 59. ISBN 81-7708-062-8.
  9. ^ "International Economics & Trade - India: Foreign Trade Policy". worldbank.org. 2011. Retrieved 20 October 2011.
  10. ^ Chakraborty, Subhayan (29 January 2018). "Only 5 states account for 70% of exports, Economic Survey shows". Business Standard India. Retrieved 11 February 2018.
  11. ^ Macroeconomics and Elementary Statistics. ISBN 9788187140900.
  12. ^ "Top India Exports". www.worldsrichestcountries.com. Retrieved 7 December 2015.
  13. ^ "Top India Imports". www.worldsrichestcountries.com. Retrieved 7 December 2015.
  14. ^ Jump up to: a b "Economic Survey 2018: 5 states show the way with 70% of exports, enjoy higher standard of living". The Indian Express. 30 January 2018. Retrieved 11 February 2018.
  15. ^ "India - Imports - Historical Data Graphs per Year". Retrieved 27 December 2015.
  16. ^ "The World Factbook". www.cia.gov. Retrieved 27 December 2015.
  17. ^ "Export Import Data". www.eximatlasindia.com. Retrieved 24 March 2018.
  18. ^ "Total Trade". commerce.nic.in. Department of Commerce. Archived from the original on 22 November 2018. Retrieved 20 December 2015.

External links[]

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