INDIAS INTERNATIONAL TRADE RECENT TRENDS AND PERFORMANCES

INTRODUCTION TO INDIAS INTERNATIONAL TRADE:

India is fast emerging as a global leader, what with its vast, natural resources, and huge base of skilled manpower. Combined with cutting edge technology, Indian trade market is making its presence felt all across the world. Indian products and services are seen as of international standards and globally competitive. Trade in India has made good progress on liberalizing trade regimes and cutting tariffs since the recent times, when most of the countries started with reforms. Get ready for your introduction to Indian trade market. Until quite recently, considerable protection levels reflected in the significant tariff peaks and dispersed protection levels were seen in India. Serious constraints to private activity in infrastructure, economic governance, financial impeded export competitiveness too. Insufficient and unreliable power supply, inhibiting red tape is a few of the many examples of these constraints. Undertaking considerable industrial deregulation and other structural reforms, trade in India recognizes that strong exports are critical for overall economic growth and poverty reduction. Export-led growth has thus become a key thrust for the trade in India.

HISTORY OF INDIAS INTERNATIONAL TRADE:

India is looked upon as a country with immense resources available through its length and breadth. The objective of this brief paper is to go through the timeline of history of Indian Trade right from ancient times till today, when it has a foothold in the major and the not so major economies of the world. India was famed for her fabulous wealth ever since the ancient times till the establishment of the British Empire. Indian trade history reflects that despite the frequent political upheavals during the 12th to the 16th centuries, the country was still prosperous. The political and economic policies followed by the Muslim rulers propagated the growth of towns in various parts of the country.

These towns grew into trade and industrial centers which in turn led to the general prosperity. From the 16th to the 18th centuries, covering the two hundred years of Mughal rule, Indian urbanization saw further growth.

IMPORT AND EXPORT PRODUCTS IN INDIA:

Import and export products in India are an immense way to inflate your business and a best way to participate in the global economy. In reality, companies that do business worldwide grow more rapidly and fail less frequently than companies that don't. If you are ready to start import and export products in India and become a part of international trade, then there are a number of government programs to help you get started. Also, there are strict set of laws for top import and exports in India. Top import and export products in India bring new heights to the trade business, and also contribute in the international trading. However the business of top imports and exports has become one of the newest commercial trends of this decade. According to a survey, American companies trade in over 2.5 trillion dollars a year in commodities, of which small businesses manage over 95 percent. As being the owner of a top import and export products enterprise, you can work as a dispenser by focusing on exporting and importing goods and services that cannot be achieved on national soil (e.g., Russian caviar and French perfumes) or those that are economical when imported from other countries (e.g., Chinese electronics). An Export Management Company can focus in one industry or work with diverse types of import export manufacturers. This is a good selection for products that are assured to sell because of high demand or an established brand name. In contrast to other businesses, though, import export companies have a very small startup cost. The top imports and exports in India have a growing list depending upon the demand and supply of products in the country. While the majority products can be exported without the need for licenses, some specialized products or high-risk items, such as firearms or pharmaceuticals, may necessitate special government permits. If that's the case, costs may run significantly higher. Many top import and export products in India are regulated by centralized agencies. If you import or export some specific types of products, you may be required to obtain specific licenses and permits or complete supplementary paperwork.

These top imports and exports in India include products like: Agricultural products Automobiles Chemicals Food and beverage products Industrial goods Pharmaceuticals and biotechnology Defense products, etc Top import and export products in India : Living animals, milk products, wheat, rice, coffee, tea, spices, cumin seed, tamarind powder, sesame seed, sugar, henna, herbal extract, medicines, fertilizers, chemicals, salt, iron ores, minerals, books, leather products, textile, dyes and pigments, home furnishing, footwear, brass items, Aluminium items, sanitary wear, ceramic, glassware, flanges, fittings, embroidered and Zari items, pipe and pipe fittings, handicraft, cables, medical disposables, laboratory equipments, surgical equipments, sports goods, wooden furniture and various other engineering and electrical products. The mounting expenditures of the core income sections of the society have resulted in the imports of the country. The chief items of imports are: Cereals and preparations, Fertilizers, Edible Oil, Sugar, Pulp and waste paper, Paper, Newsprint, Crude rubber, Non-ferrous Metals, Metalliferrous ores and metal scrap, Iron and Steel, Crude Petroleum and petroleum products, Pearls, Precious and Semi-Precious stones, Machinery, Project Goods, Pulses, Coal and its derivatives, Non-metallic, Organic & Inorganic chemicals, Dyeing, tanning material, Medicinal products and Pharma products, Artificial resins, yarn & fabrics(silk, cotton, wool), electronic goods, wood and wood products, gold and silver, essential oils, computer software, etc

EXPORTS:
Indias merchandise exports reached a level of US$ 178.7 billion during 2009-10 registering a negative growth of 3.5 percent as compared to a growth of 13.6 percent during the previous year. Notwithstanding the deceleration of the growth in 2009-2010, Indias export sector has exhibited remarkable resilience and dynamism in recent years. Our merchandise exports recorded a compound annual growth rate (CAGR) of 22.0 per cent during the five year period from 2004-05 to 2008-09 as compared to the preceding five years when exports increased by a lower CAGR of 14.0 per cent. According to latest WTO data (2009), Indias share in the world merchandise exports increased from 0.8 per cent in 2004 to 1.3 per cent in 2008. India also improved its ranking among the leading exporters in world merchandise trade from 30th in 2004 to 21st in 2009. Indias exports have not been affected to the same extent as that of other economies of the world during the phase of global slowdown. After declining consistently for the first seven months of the year 2009-10, Indias exports reversed the trend in October, 2009 by registering a positive growth of 3.4%. The upward trend has been maintained since then wherein exports grew at the rate of 30.0 % in November 2009; 20.3% in December, 2009, 18.7% in January, 2010, 34.8% in February, 2010; 54.1 % in March 2010, 38.5 % in April 2010, 30.1 % in May 2010, 43.8% in June 2010, 11.7 % in July 2010, 22.5% in August 2010, 23.2 % in September 2010, 21.3% in October, 2010, 26.5% in November 2010 and 36.4% in December 2010. (Table 2.1) The extent of sustained recovery of exports would ultimately depend on the strength of the recovery of global demand.

Month

Month-wise exports from November, 2009 to December, 2010 Percentage of Growth 30.0 20.3 18.7 34.8 54.1

November, 2009 December, 2009 January, 2010 February, 2010 March, 2010

April, 2010 May, 2010 June, 2010 July, 2010 August, 2010 September, 2010 October, 2010 November, 2010 December, 2010

42.1 34.1 46.5 13.8 23.3 23.8 21.3 26.5 36.4

The Government had set an export target of US$ 175 billion for 2009-10. With merchandise exports reaching US$ 178.7 billion in 2009-10, the actual exports exceeded the target by 2.1 per cent which is a remarkable achievement during a period of recession in Indias major export destinations. During 2010-11 (Apr-Dec) exports reached a level of US$ 164.7 billion registering a growth of 29.5 per cent with almost all the major commodity groups making positive growth. Only seven (7) commodities showed negative growth viz. Tea (1.95), Cashew (7.73), Fruits & Vegetables (28.03), Iron Ore (93.14), Computer Software (92.73).

IMPORTS
Imports during 2009-10 were US$ 288.4 billion as against US$ 303.7 billion during 2008-09 registering a negative growth of 5.1 per cent in Dollar terms. Oil imports were valued at US$ 87.1 billion which was 6.5 per cent lower than those valued at US$ 93.2 billion in the previous year. Non-oil imports were US$ 201.2 billion which was 3.4 per cent higher than nonoil imports of US$194.6 billion in the previous year.

Performance of Exports, Imports and Balance of Trade Value in Rs. Crores

S.N

Year

Exports

%Growth

Imports

%Growth

Trade Balance

1. 2. 3. 4. 5. 6. 8.

2004-2005 2005-2006 2006-2007 2007-2008 2008-2009 2009-2010 2010-11 (Apr-Dec)

375,340 456,418 571,779 655,864 840,755 845,534 751,633

27.94 21.60 25.28 14.71 28.19 0.57 23.44

501,065 660,409 840,506 1,012,312 1,374,436 1,363,736 1,126,513

39.53 31.80 27.27 20.44 35.77 -0.78 13.61

-125,725 -203,991 -268,727 -356,448 -533,680 -518,202 -374,880

Indias exports has not been affected to the same extent as other economies of the world during the phase of global slowdown, yet exports which had suffered a decline since October, 2008 continued of first seven consecutive months in 2009-10 as well. However, the declining trend became less steep from 2005 onwards and turned the positive phase from the month of November, 2009 reversing the earlier trend.

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 Indias 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 percent 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 Indias share in global trade by 2020. Subsequently, an Annual Supplement 2010-11 to the FTP (2009-14) was announced on 23rd August, 2010. In this Supplement further measures to enhance exports have been elaborated. Further measures were announced on 11th February 2011.

ANNUAL REPORT 2011-12:

1. Plantation Crops: Export of plantation crops during 2010-11 (AprilSep), increased by 28.1 per cent in US$ terms compared with the corresponding period of the previous year. Export of Coffee registered a growth of 43.2 per cent, the value increasing from US$ 193.4 million to US$ 277 million. Export of Tea also increased by 17.0 per cent. 2. 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 2010-11 (AprilSeptember), exports of commodities under this group registered a growth of 15.6 per cent with the value of exports going up from US$5,846 million in the previous year to US$ 6,756 million during the current year. 3. Ores and Minerals Exports of ores and minerals were estimated at US$ 4,410 million during 2010-11 (AprilSeptember) registering a growth of 34.5 per cent over the same period of the previous year. Sub groups viz. Processed Minerals recorded a growth of 50.6 per cent and Coal has a negative growth of 43 per cent respectively. Export of Mica has registered growth of 78 per cent. 4. Leather and Leather Manufactures Export of leather and leather manufactures recorded a growth of 14 per cent during 201011 (April-September). The value of exports increased to US$ 1,833.4 million from US$ 1,611.2 million during the same period of the previous year. Exports of leather and manufactures have registered a growth of 15.6 per cent and Leather Footwear also registered a growth of 11.7 percent. 5. Gems and Jewellery

The export of gems and jewellery during 2010-11 (April-September) increased to US$ 15,664 million from US$ 13,757 million during the corresponding period of last year showing a growth of 13.9 per cent. 6. Chemicals and Related Products During the period 2010-11 (April-September), the value of exports of chemicals and allied products increased to US$ 13,994 million from US$ 10,962.2 million during the same period of the previous year registering a growth of 27.7 per cent. Rubber, glass and other products residual chemicals and allied products and basic chemicals, pharmaceuticals and cosmetics and plastic & linoleum have also registered a positive growth. 7. Engineering Goods Items under this group consist of machinery, iron & steel and other engineering items. Export from this sector during the period 2010-11(April-September) stood at US$ 23,009.2 million compared with US$15,763 million during the same period of the previous year, registering a growth of 46 per cent. Export of machine tools have registered a negative growth of 1.2 per cent and transport equipments have registered growth of 61.8 per cent. Machinery & instruments (10.5%), iron & steel (63.9%) and other engineering items (59.8%) have registered a positive growth. 8. Electronic Goods During the period 2010-11 (April-September), exports of electronic goods as a group were estimated at US$3,470 million compared with US$ 3,167 million during the corresponding period of last year, registering a positive growth of 9.6 per cent. 9. Textiles During the period 2010-11 (April-September), the value of textiles exports was estimated at US$ 10,221 million compared with US$ 9,296 million in the corresponding period of the previous year, recording a growth of 10 per cent. The export of natural silk textiles registered a negative growth of 0.6 per cent and manmade textiles & made ups has shown a positive growth of 5.5 per cent.

10. Handicrafts and Carpets Exports of handicrafts declined to US$ 85 million during 2010-11 (April-September), from US$ 102.6 million during the corresponding period of the previous year registering a negative growth of 17.4 per cent. Export of carpets increased to US$ 428.8 million from US$ 319.4 million during the same period last year registering a positive growth of 34.3 per cent. 11. Project Goods During 2010-11 (April-September), the export of project goods were estimated at US$ 29.5 million compared with US$ 67.4 million during the corresponding period of last year registering a negative growth of 56.2 per cent. 12. Petroleum Products Export of petroleum products increased to US$ 17,857 million during 2010-11 (AprilSeptember), as compared with US$ 10,759.4 million during the same period of last year recording a growth of 66 per cent. 13. Cotton Raw including Waste There was a growth in the exports of cotton raw including waste by 35.6 per cent from US$ 280.7 million in 2009-10 (April-September) to US$ 381 million during 2010-11 (AprilSeptember).

CONCLUSION:
India is a great trading community. Flourishing during the Mughal rule and then dwindling to non-existence by the end of the eighteenth century, [Link] attempts to study India trade promotion, climbing to global heights today. Read on to know all about [Link]. Today, India is fast emerging as a global leader, what with its vast, natural resources. You have just come to the best resource to understand the trade in India.

P.S.R. Engineering College

Sivakasi

Department of Management Studies

12BAF2 - INTERNATIONAL TRADE FINANCE

Topic: RECENT TRENDS IN INDIAS INTERNATIONAL TRADE

Date of Submission: 03.09.2013

Submitted To, Ms. [Link] [Link]., MBA, Ramachandran.R [Link], 12BA035,

Submitted by,

Department of Management Studies. MBA.

IInd year