INDIA’S INTERNATIONAL TRADE

AN OVERVIEW

JULY 2006
 India’s Foreign Trade – Trends
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Towards Increased Global Integration through Trade

160 245.2 ‰ India’s Trade Turnover increased

Exports 250
Imports from $95 bn in FY02 to $245 bn in
Total Trade (Right Axis) 142
195.1 FY06 (CAGR of 26%)
120 200
103
112 ‰ India’s Exports increased from
142.0 84 150
80 114.1 $44 bn in FY02 to $103 bn in FY06
64 78
95.2 (CAGR of 23%)
53 100
44 61
40 51 ‰ India’s Imports increased from
50
$51 bn to $142 bn (CAGR of 29%)
0 0 ‰ Share in world merchandise
FY 2002 FY 2003 FY 2004 FY 2005 FY 2006
exports in 2005 – 0.9%
US$ bn

Source: MOCI, Govt. of India

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 India’s Overseas Investment
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An increasing trend… both in terms of approvals & actuals

US$ mn
1554 2804 ‰ Indian overseas direct investments
2004-05
1492
(ODI) have shown a rising trend –
2003-04 1451
both in terms of approvals as also in
1795
2002-03 1545 terms of actual outflows.
982 2996
2001-02 ‰ Approved ODI increased from US$
1212
2000-01 1380 557 mn in FY 1997 to US$ 2800 mn in

1999-00
319 FY 2005.
1757

1998-99
143 ‰ Actual outflows shot up by more
250
121 than seven times from US$ 205 mn
1997-98 626
to US$ 1554 mn during the same
205
1996-97 557 Approved Actual outflows
period.

Source: MoF, Govt. of India

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 Direction of Trade (FY2006)
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India’s Major Export Markets (US$ bn) India’s Major Import Sources (US$ bn)

17.2 China 10.7

USA
8.6 USA 7.8
UAE
6.7 Switzerland 6.5
China
5.6 Germany 5.8
Singapore
5.1 Australia 4.9
UK
Hong Kong 4.5 Belgium 4.7

3.5 South Korea 4.3

Germany
Belgium 2.9 UAE 4.3

Italy 2.5 UK 3.9

Japan 2.4 Japan 3.6

India's Total Exports: US$ 103 bn India's Total Imports: US$ 142 bn

‰ USA – India’s largest trading partner; but Asian countries gaining significance
‰ China – increasingly becoming an important partner (has become the largest source of imports)
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 India’s Export: Shifting Southwards
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India’s Export Markets (FY1999 - $33 bn) India’s Export Markets (FY2006 - $103 bn)

South South
America
West
America West
2%
Europe 3% Europe
29% 24%
ca 7%
North North Afri
America Africa 6% America
23% 18%

Asia and CIS &

Asia and
CIS & Oceania CEE
Oceania
CEE 38% 1%
47%
2%

‰ Direction of exports moving towards the Southern countries, particularly Asia.

‰ Share of Asia & Oceania increased from 38% to 47%.
‰ Future trade flows to be geared towards the developing nations (buttressed by GOI policies).
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 Major Export Items
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Top 10 Export Items (FY 2006, US$ bn)

Gems & Jewellery 15.5

Petroleum products 11.5

RMG Cotton & accessories 6.3

Drugs & pharmaceuticals 4.9

Machinery & instruments 4.8

Transport equipments 4.6

Manufactures of metals 4.2

Cotton yarn & fabrics 3.9

Iron ore 3.8

Pri. & semi-fin. iron & steel 3.0

Total Exports (FY 2006) : US$ 102.7 bn

Source: DGCIS, MOCI

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 Major Import Items
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Top 10 Import Items (FY 2006, US$ bn)

Petro crude & prdts 35.0

Electronic goods 13.2
Gold 10.7

Non-elec machinery 9.9

Pearls, prec. stones 9.1

Organic chemicals 4.7

Iron & steel 4.2

Metallifer ores & scrap 3.8

Coal & coke 3.7

Transport equipments 3.1 Total Imports (FY 2006) : US$ 142.4 bn

Source: DGCIS, MOCI

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 India’s Services Exports
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Services trade balance in surplus (US$ bn)

60.6
Exports
Imports 51.3

36.7 38.3

25.0
20.8
17.1 17.1 18.4
16.3 14.6
13.8

2000-01 2001-02 2002-03 2003-04 2004-05 2005-06

Source: RBI
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 Trend in IT & ITES Exports
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Exports contribute 63% to Indian IT & ITES Sector IT & ITES Exports: Regional Distribution

40.0 1.2%
Production Exports 36.0 7.4%
35.0 22.6%

30.0 28.2

25.0 23.4 0.6%

21.5 68.2%
20.0 17.9 US Africa Europe Asia & Oceania Others
16.1
15.0 13.4 13.3
12.1 ‰ IT & ITES exports rose from $4.0 bn
9.9
10.0 8.2 7.6 in FY 2000 to $17.9 bn in FY 2005.
6.2
5.0 4.0 ‰ Projected – US$ 60 bn by 2010.
‰ USA – largest destination of India’s
0.0
FY '00 FY '01 FY '02 FY '03 FY '04 FY '05 FY '06* IT exports with a share of 68%.
US$ bn Source: NASSCOM ‰ Other countries gaining importance.

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