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Annual Report 2009-2010
Trends In India's Foreign Trade


India's Trade Performance

India’s merchandise exports reached a level of US $ 185.3 billion during 2008-09 registering a growth of 13.6 percent as compared to a growth of 29.1 percent during the previous year. Notwithstanding the deceleration of the growth in 2008-09, India’s export sector has exhibited remarkable resilience and dynamism in the recent years.  Our merchandise exports recorded an Average Annual Growth Rate (AAGR) of 23.9 per cent during the five year period from 2004-05 to 2008-09, as compared to the preceding five years when the exports increased by a lower AAGR of 14.3 per cent.  According to latest WTO data (2009), India’s share in the world merchandise exports increased from 0.8 per cent in 2004 to 1.1 per cent in 2008. India also improved its ranking in the leading exporters in world merchandise trade from 30th in 2004 to 27th in 2008.

 

Box: 2.1

 Export Target and Achievement during the last five years

The Government had initially set an export target of US $ 200 billion for 2008-09, which was later revised downward to US $ 175 billion because of global slowdown in the second half of the year. With merchandise exports reaching US $ 185.3 billion in 2008-09, the actual exports exceeded the target by 5.9 per cent which is a remarkable achievement during a period of recession in countries of India’s major export destinations.

Exports

Exports recorded high growth during the first half of 2008-09 although a deceleration was witnessed during the subsequent months due to global economic slowdown.  During 2008-09 (Apr-Sept) exports grew by 48.1 per cent with almost all the major commodity groups, except marine products, handicrafts recording significant growth. In the second half of the year 2008-09 (Oct-Mar), exports  declined by (-) 14.7 per cent with almost all the major commodity groups, except Gems & Jewellery, RMG, Electronics goods,  recording significant negative growth. Commodities like Engineering Goods, Other basic Chemicals, Man-made Yarn, Leather & Leather Manufactures, and Spices which recorded overall positive growth during the year, as a whole, also recorded negative growth during the second half. However, despite the significant decline in the   second half of the 2008-09, exports registered an overall growth of 13.6 per cent for the year. 

Imports

Cumulative imports during 2008-09 was US $ 303.7 billion as against US $ 251.6 billion during the corresponding period of the previous year registering a growth of 20.7 per cent in $ terms. Oil imports were valued at US $ 93.7 billion which was 17.4 per cent higher than oil imports valued US $ 79.8 billion in the corresponding period of previous year. Non-oil imports valued US $ 210.0 billion which was 22.2 per cent higher than non-oil imports of US $ 171.8 billion in previous year.

Table: 2.1 Export, Imports & Balance of  Trade

 

Value in Rs. Crore

Year

Exports

GrowthRate (%)

Imports

GrowthRate (%)

Balance of Trade

2004-2005

375340

27.9

501065

39.5

-125725

2005-2006

456418

21.6

660409

31.8

-203991

2006-2007

571779

25.3

840506

27.3

-268727

2007-2008

655864

14.7

1012312

20.4

-356448

2008-2009

840755

28.2

1374436

35.8

-533680

2009-2010

563304

-13.7

927969

-17.6

-364665

 

Value in US $ Billion

Year

Exports

Growth Rate (%)

Imports

Growth Rate (%)

Balance of Trade

2004-2005

83.5

30.9

111.5

42.7

-28.0

2005-2006

103.1

23.4

149.2

33.8

-46.1

2006-2007

126.4

22.6

185.7

24.5

-59.3

2007-2008

163.1

29.1

251.7

35.5

-88.6

2008-2009

185.3

13.6

303.7

20.7

-118.4

2009-2010

117.5

-20.3

193.8

-23.6

-76.2

(P): Provisional                     Data Source: DGCI&S, Kolkata

 

Trade Balance

The Trade deficit in 2008-09 was estimated at US $ 118.4 billion which was higher than the deficit of US $ 88.6 billion during 2007-08. Performance of Exports, Imports and Balance of Trade during 2004-05 to 2009-10 (April- December) is given in the table 2.1 below:

During the year 2009-10 (April-December), the cumulative value of exports was US $ 117.6 billion as against US $ 147.6 billion registering a decline of 20.3 per cent in US $ term over the corresponding period of the previous year.  Cumulative of imports for the same period was US $ 193.8 billion as against US $ 253.8 billion during the corresponding period  of the previous year registering a decline of 23.6 per cent in US $ terms. Oil imports for the same period were valued at US $ 56.9 billion which was 29.8 per cent lower than oil imports valued US $ 81.1 billion in the corresponding period of last year. Non-oil imports for the same period valued at US $ 136.9 billion which was 20.7 per cent lower than non-oil imports of US $ 172.7 billion in December, 2008. The Trade deficit in April-December 2009-10 was estimated at US $ 76.2 billion which was lower than the deficit of US $ 106.2 billion during April-December 2008.

India’s exports have not been affected to the same extent as other economies of the world during the phase of global slowdown, yet our exports which suffered a decline since October 2008  continued for first seven consecutive months in 2009-10 as well. However, growth during the first phase of 2009-10 though continued to be negative was progressively slower from June 2009 onwards and entered the positive phase from the month of November 2009 reversing the earlier trend.

Trade Balance Foreign Trade Policy, 2009-14

The Foreign Trade Policy (FTP) 2009-14 was announced on 27th August, 2009 in the backdrop of a fall in India’s exports due to global slowdown. The short term objective of FTP (2009-14) was to arrest and reverse the declining trend of exports as well as to provide additional support especially to those sectors which were hit badly by recession in the developed world. The Policy envisaged an annual export growth of 15 per cent with an annual export target of US$ 200 billion by March 2011 and to come back on the high export growth path of around 25 per cent per annum in the remaining three years of this Foreign Trade Policy i.e. up to 2014. The long term policy objective for the Government is to double India’s share in global trade by 2020.

CHART 2.1

 

Exports by Principal Commodities

Disaggregated data on exports by Principal Commodities, in $ terms, available for the period 2009-10 (April–September) as compared with the corresponding period of the previous year are given in Table 2.2. Exports during the period registered a decline of (-) 29.67 per cent mainly due to significant fall in the exports of  Engineering Goods, Gems & Jewellery, Petroleum Products, Agriculture and allied products,  Chemical & related products and Ores & Minerals.

 

 

The share of top five Principal Commodity Groups in India’s total exports during 2009-10 (April-September) is given at Chart 2.2.

The export performance (in terms of growth) of top five commodities during 2009-10
(April-September) vis-a-vis the corresponding period of the previous year is shown at Chart 2.3. 

Plantation Crops 

Export of plantation crops during 2009-10 (April–September), decreased by 25.8 per cent in US $ terms compared with the corresponding period of the previous year. Export of Coffee registered a negative growth of 34.6 per cent, the value increasing from US $ 610.1 million to US $ 452.4 million. Export of Tea also decreased by 17.7 per cent.

Agriculture and Allied Products

Agriculture and Allied Products as a group include Cereals, Pulses, Tobacco, Spices,Nuts and Seeds, Oil Meals, Guargum Meals, Castor Oil, Shellac, Sugar & Molasses,Processed Food, Meat & Meat Products, etc. During 2009-10 (April–September), exports of commodities under this group registered a negative growth of 34.1 per cent with thevalue of exports falling from US $ 8613.8 million in the previous year to US $ 5675.2 million during the current year.

 

Ores and Minerals

Exports of Ores and Minerals were estimated at US $ 2884.1million during 2009-10 (April-September) registering a negative growth of 35.5 per cent over the same period of the previous year. Sub groups viz. Processed Minerals, has recorded a negative growth of 28.9 per cent and Coal a positive growth of 40.4 per cent respectively. Mica has registered negative growth of 27.7per cent.

Leather and Leather Manufactures

Export of Leather and Leather Manufactures recorded a negative growth of 24.0 per cent during 2009-10 (April-September). The value of exports decreased to US $ 1531.0 million from US $ 2013.0 million during the same period of the previous year. Exports of Leather and Manufactures have registered a negative growth of 28.5 per cent and Leather Footwear also registered a negative growth of 18.2 per cent. 

Gems and Jewellery

The export of Gems and Jewelry during 2009-10 (April-September) decreased to US $ 13608.4 million from US $ 17387.7million during the corresponding period of last year showing a negative growth of 21.7 per cent.

Chemicals and Related Products

During the period 2009-10 (April-September), the value of exports of Chemicals and Allied Products decreased to US $ 10550.0 million from US $ 13228.1 million during the same period of the previous year registering a negative growth of 20.2 per cent. Rubber, Glass & Other Products; Residual Chemicals & Allied Products and Basic Chemicals, Pharmaceuticals & Cosmetics and Plastic & Linoleum have also registered a negative growth.

Engineering Goods

Items under this group consist of Machinery, Iron & Steel and Other Engineering items. Export from this sector during the period 2009-10 (April-September) stood at US $ 15143.7million compared with US $ 23214.0 million during the same period of the previous year, registering a negative growth of 34.8 per cent. Export of Machine Tools and Transport Equipments have registered negative growth of 42.6 and 19.1 per cent respectively.

Electronic Goods

During the period 2009-10 (April-September), exports of Electronic Goods as a group were estimated at US $3086.8 million compared with US $ 3828.2 million during the corresponding period of last year, registering a negative growth of 19.4 per cent.

Textiles

During the period 2009-10 (April-September), the value of Textiles exports was estimated at US $ 8657.3 million compared with US $ 10151.5 million in the corresponding period of the previous year, recording a negative growth of 14.7 per cent. The export of Natural Silk Textiles registered a negative growth of 31.0 per cent and Manmade Textiles & Made Ups has shown a positive growth of 2.4 per cent.

Handicrafts and Carpets

Exports of Handicrafts declined to US $ 94.6 million during 2009-10 (April-September), from US $ 167.2 million during the corresponding period of the previous year registering a negative growth of 43.4 per cent. Export of carpets increased marginally to US $ 437.8 million from US $ 427.9 million during the same period last year registering a positive growth of 2.3 per cent.

Project Goods

During 2009-10 (April-September), the export of Project Goods were estimated at US $ 63.5 million compared with US $ 118.6 million during the corresponding period of last year registering a negative growth of 46.4 per cent.

Petroleum Products

Export of Petroleum Products decreased to US $ 10579.8 million during 2009-10 (April-September), as compared with US $ 18721.4 million during the same period of last year recording a negative growth of 43.5 per cent.

 

 

Cotton Raw including Waste

There was a negative growth in the exports of Cotton Raw including waste by 35.3 per cent from US $ 400.3 million in 2008-09 (April-September) to US $ 259.0 million during 2009-10 (April-September).

Imports by Principal Commodities

Disaggregated data on imports by principal commodities, in $ terms, available for the period 2009-10 (April–September), as compared to the corresponding period of the previous year are given in Table 2.3. Imports during the period

 

 

registered a decline of (-) 23.7 per cent due to a significant fall in the import of commodities such as Petroleum crude & products, Gold, Electronics Goods, Machinery (except electrical & electronics) and Pearls Precious and semi-precious stones, etc.

The share of top five Principal Commodity in India’s total imports during 2009-10 (April-September) is given at Chart 2.4.

The import performance by top five Principal commodities during 2009-10 (April–September) vis-a-vis the corresponding period of the previous year is shown at Chart 2.5.

Fertilizers

During 2009-10 (April-September), import of Fertilizers (manufactured) decreased to US $ 2781.0 million from US $ 6947.0 million in April-September 2008 recording a negative growth of 60.0 per cent.

Petroleum Crude & Products

The import of Petroleum Crude & Products stood at US $ 37386.3 million during April - September, 2009 against US $ 63284.7 million during the same period of the previous year registering a negative growth of 41.0 per cent.

Pearls, Precious and Semi-Precious Stones

Import of Pearls and Precious and Semi-Precious Stones during 2009-10 (April-September) decreased to US $ 5430.1 million from US $ 10430.1 million during the corresponding period of the previous year registering a negative growth of 48.0 per cent.

Capital Goods

Import of Capital Goods, largely comprises of Machinery, including Transport Equipment and Electrical Machinery. Import of Machine Tools, Non-Electrical Machinery, Electrical Machinery and Transport Equipment registered a negative growth of 41.1 per cent, 22.6 per cent, 29.2 per cent, and 57.3 per cent respectively.

Organic and Inorganic Chemicals

During 2009-10 (April-September), import of Organic and Inorganic Chemicals decreased to US $ 5628.6 million from US $ 7644.5 million during the same period of last year, registering

Direction of India’s Foreign Trade

The value of India’s exports to and imports from major regions/ countries are given in Table 2.4 & 2.5. Share of major destinations of India’s Exports and sources of Imports during 2009-10 (April-September) are given in Chart 2.6 and 2.7 respectively.

Chart 2.6

Chart 2.7

 

During the period 2009-10 (April-September), the share of Asia and ASEAN region comprising South Asia, East Asia, Mid-Eastern and Gulf countries accounted for 55.0 per cent of India’s total exports. The share of Europe and America in India’s exports stood at 21.4 per cent and 15.3 per cent respectively of which EU countries (27) comprises 20.0 per cent. During the period, United Arab Emirates (14.4 per cent) has been the most important country of export destination followed by USA (11.5 per cent), China (5.1 per cent), Hong Kong (4.5 per cent), Singapore (4.3 per cent), Netherland (3.7 per cent), U.K. (3.7 per cent), Germany (3.1 per cent), Saudi Arabia (2.7 per cent) and Belgium (2.1 per cent).

Asia and ASEAN accounted for 61.3 per cent of India’s total imports during the period followed by Europe (19.1 per cent) and America (9.4 per cent). Amongindividual countries the share of China stood highest at (12.0 per cent) followed by USA (6.0 per cent), UAE (6.0 per cent), Saudi

Arabia (5.5 per cent), Iran (4.5 per cent), Switzerland (4.4 per cent), Germany (3.8 per cent), Kuwait (2.9 per cent), Nigeria (2.5 per cent) and Iraq (2.3 per cent).

Import of Sensitive Items during April 09- September 09

The total import of sensitive items for the period April-September 2009-10 has been Rs.29256.29 crore as compared to Rs.21186.61 crore during the corresponding period of last year thereby showing an increase of 38.1%. The gross import of all commodities during same period of current year was Rs.790644 crore as compared to Rs 605075 crore during the same period of last year. Thus import of sensitive items constitutes 2.7% and 4.8% of the gross imports during last year and current year respectively. The summary of import of Sensitive items is given in the Table 2.6.

Imports of automobiles, cotton & silk, products of SSI alcoholic beverages and food grains have shown a decline at broad group level during the period. Imports of all other items viz. edible oil, Pulses, fruits & vegetables (including nuts), rubber, spices, marble & granite, tea & coffee and milk & milk products have shown increase during the period under reference.

In the edible oil segment, the import has increased from Rs 6265.69 crore last year to Rs 11831.43 crore for the corresponding period of this year. The imports of both crude edible oil as well as refined oil have gone up by 97% and 55% respectively. The increase in edible oil import is mainly due to substantial increase in import of crude palm oil and its fractions.

Imports of sensitive items from Indonesia, Myanmar, Brazil, Malaysia, United States of America, Japan, Canada, Ukraine, Argentina, Australia, Benin, Guinea Bissau etc. have gone up while those from China P RP, Korea RP, Germany, Thailand, Cote D’ Ivoire, Czech Republic etc. have shown a decrease.