INDIAS FOREIGN TRADE:

VALUE COMPOSITION AND

DIRECTION
 Up to early 90s the emphasis was on
Inward oriented policies. This means
large scale Import substitution( through
extensive protection of Domestic
industries), direct controls on imports and
Investment and overvalued exchange
rates, export sector was marked with
extreme pessimism.
 Continued..
But during 1991 massive trade reforms were
announced to open up the economy to foreign
trade and to integrate the Indian economy in
the Global economy
Volume of Indias foreign trade
India share in world trade (in %)

Year Trade
1950 1.78
1991 .53
2000 .70
2005 1.00
2009* 1.5

* Means trade policy 2004-09 has set a target of achieving this target by 2009
 A study on foreign trade data revels that trade
balance was positive in only two years i.e
1972-73 and 1976-77 from the entire
planning period till now
 World trade report 2006
Total world merchandise 10121 billion dollars
exports in 2005.
Country having highest GERMANY
merchandise exports.
Total Indian exports(2007) 150 billion dollars

% share of Indian exports .89% in 2005

in world exports
% share of China in 7.5 %
exports in world exports
 Composition of Indias Foreign
Trade during 2005-06
Exports Imports
Commodities share Commodities share
Agri. And allied 7.08 Crude petroleum 32.12%
products

Gems and 17.26 Pearls precious 7.77 %

jewellery stones
Engg. Goods 18.27 Gold and silver 8.51%

Textile 14.32

Petroleum 11.33
products
 Composition of Indias trade during 2005-06
shows that Engg. Goods and Gems and
Jewellery possess the highest share in exports
with 18.3% and 17.3 % respectively. Crude
petroleum remains the highest import item in
value term having 32.1 % share in total
imports in the country during 2005-06.
 Direction of Trade
In the pre independence period ,the direction of
Indias foreign trade was determined not
according to the comparative cost dvantage but
by the colonial relations between India and
Britain.
But now the situation has changed now india is
having trade relation with each and every
country of the world this is the result of New
Economic Policy which India adopted during
90s.
 Direction of Indias Trade
Imports Exports
1960- 1990-91 2005-06 1960-61 1990-91 2005-06
61
OECD 78 54 32.7 66.1 53.5 44.2

EU
37.1 29.4 15.7 18.4 21.8 21.6
USA
29.2 12.1 5.5 16 14.7 16.7
OPEC 4.6 16.3 7.7 4.1 5.6 14.8

DEVELOPING
COUTNRIES
- .1 7.5 - .1 6.5

CHINA

SOURCE: RESERVE BANK OF INDIA REPORTS AND HANDBOOK OF STATISTICS

 During Planning period as a whole ,India has
obtained maximum imports from USA the reason
being that India has imported large scale quantities of
capital goods ,Intermediate goods and food grain
from that country.
In 2005-06, China occupied the first position in
Indias imports(7.5%) followed be USA(5.5%).
In 2005-06 , USA with share of 16.7 (%) occupied
first position in Indias Exports followed by UAE
 Growth and Structure of Indias
Foreign trade since 1991
Indias Trade has increased significantly in the
post reform period. In absolute terms the trade
volume rose from US $ 42.2 billion in 1990-91
to US $ 252.26 billion.
In 2004-05 exports increased by 30.8% over
the previous year while Imports increased by
42.7 % over the previous year.
 Foreign Trade Policy 2004-09
1.5 % share of global trade by 2009.
Special focus on five traditional exports
agriculture, leather & footwear etc so as to
make exports.
Vishesh Krishi Upaj Yojana to be introduced
for boosting exports of agriculture products.
Duty free Imports for service importers .