- Over the last ten years, India’s merchandise trade (on customs basis) increased manifold from US $ 195·1 billion in 2004-05 to US $ 655·013 billion in 2016-17 helping India’s share in global exports and imports improve from 0·8 per cent and 1·0 per cent respectively in 2004 to 1·62 per cent and 2·34 per cent in 2015.
- India’s ranking amongst the leading exporters and importers improved from 30 and 23 in 2004 to 19 and 13 respectively in 2015.
- During 2016-17, India’s foreign trade scenario was :
Exports $ 274·645 billion
Imports $ 380·368 billion
Trade Deficit $ 105·723 billion
- Value of imports declined from US$ 448 billion in 2014-15 to US$ 380·368 billion in 2015-16, mainly on account of decline in crude oil prices resulting in lower levels of POL imports. During 2016-17 imports declined by 0·17 per cent to US $ 380·368 billion compared to the corresponding period of previous year. POL imports increased by 4·24 per cent.
- India’s imports from Europe, Africa, America, Asia and CIS & Baltics regions declined in 2015-16. However, in 2016-17
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RuPay |
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President Pranab Mukherjee on May 2014 dedicated to the nation indigenous card payment network called RuPay taking on the global players like Visa and Master Card. The new payment network developed by the National Payments Corporation of India (NPCI), a not-for-profit company envisioned by the Reserve Bank of India (RBI) and created by the banking industry, covers all the Automated Teller Machines (ATMs) and most of the retail and e-commerce platforms. RuPay is the coinage of two terms Rupee and Payment. With the launch of new system, India has now ranked among the “few countries in the world to have such a network built domestically to meet the card-based payment system needs of the country.” RuPay cards are accepted at all ATMs, more than 90 per cent of ‘Point of Sale’ (PoS) terminals and more than 10,000 e-commerce merchants across the country |
(April – November), imports from CIS & Baltics region increased by 10·3 per cent while other four regions witnessed decline. Top three import destinations of India were China followed by UAE and USA in 2016-17 (April-November).
- In 2015-16, India’s trade deficit declined by 13·8 per cent (vis-à-vis 2014-15) to US$ 118·7 billion. Furthermore, it declined by 10·94 per cent to US$ 105·723 billion in 2016-17 as compared to US$ 118·716 billion in previous year.
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Incentive Packages to Boost Exports |
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- India’s major imports which are re-exported after processing are capital goods, fertilizers, coal, chemicals, minerals, edible oils, food grains, pulses, paper etc.
- The major exportable items from India are agriculture and allied products, minerals, manufacturing goods.
- With a share of 23% of India’s merchandise exports, engineering sector is the largest contributor to such exports well ahead of gems and jewellery.
- India had a share of 2·3% of world exports of marine products.
- Textiles Industry contributes the maximum net foreign exchange in India’s exports because its exports are least dependent on imports.
- In 1994-95, Indian rupee was declared fully convertible on cur-rent account.
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Highlights of Foreign Trade Policy 2015–20 |
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- Finance Ministry has introduced Prevention of Money Laundering (Amendment) Bill 2008 on October 17, 2008 in the Parliament for making amendments in existing Prevention of Money Laundering Act, 2002.
- As per WTO data, India’s commercial services exports increased from US $ 51·9 billion in 2005 to US $ 155·3 billion in 2015. The share of India’s commercial services to global services to global services exports increased to 3·3 per cent in 2015 from 3·1 per cent in 2014 despite negative growth of 0·2 per cent in 2015 as compared to 5·0 per cent growth in 2014. This was due to the relatively greater fall in world services exports by 6·1 per cent in 2015.
- As per RBI’s BoP data, India’s services exports declined by 2·4 per cent in 2015-16 as a result of slowdown in global output and trade. However, in H1 of 2016-17, services exports increased by 4·0 per cent compared to 0·3 per cent growth in the same period of previous year. Growth of net services, which has been a major source of financing India’s trade deficit in recent years, was (–) 9·0 per cent in 2015-16 and (–) 10·0 per cent in H1 of 2016-17 due to relatively higher growth in imports of services. Growth of software exports which accoun-ted for 48·1 per cent share in ser-vices exports was 1·4 per cent in 2015-16 and 0·1 per cent in H1 of 2016-17.
- Nominal Effective Exchange Rate (NEER) and Real Effective Exchange Rate (REER) indices are used as indicators of external competitiveness of the country over a period of time. NEER is the weighted average of bilateral nominal exchange rates of the home currency in terms of foreign currencies, while REER is defined as a weighted average of nominal exchange rates, adjusted for home and foreign country relative price differentials.
- Anti-dumping duty imposed on Chinese equipment—India has imposed anti-dumping duty of upto 266 per cent on import of an IT equipment—also used in the telecom sector—to guard the domestic industry against cheap Chinese and Israeli shipments. According to the official declaration, the restrictive duty on import of the ‘synchronous digital hierarchy transmission equipment’ would range from three to 266 per cent on the CIF (cost, insurance and freight) value of imports.
- NAFED disallowed for white sugar imports—The government has excluded National Agricultural Cooperative Marketing Federation of India (NafEd) from the list of four nominated agencies for white sugar imports, restricting the job to the three public sector trading firms—MMTC, PEC and STC. As per NAFED’s official sources, NAFED itself requested the government to exclude it from the list as the sale of white sugar to domestic mills has become a little difficult.
- Regionwise, Asia and ASEAN countries have emerged as major export destinations for India.
- India has implemented an FTA (Free Trade Agreement) with Indonesia, a member of 10-nation ASEAN block. Implementation of this FTA slashes import duties on thousands of products like seafood, chemicals and apparel. On the reciprocal side, Indonesia will also slash import duties on Indian goods simultaneously.
- India 19th biggest exporter in merchandise trade—According to the recent classification done by the World Trade Organisation (WTO) Secretariat. India is the world’s 19th biggest exporter in merchandise trade surpassing countries like Australia, Brazil, Switzerland and Sweden. On import front India is the 13th largest importer of the world.
- The USA, the European Union, China and Japan are the major importers of services in the world.
- The China has replaced the USA as the topmost destination of India’s exports in 2015-16.
- Export-Import Ratios in top 15 trading partners show that India had bilateral trade surplus with five countries, namely the UAE, USA, Singapore, the UK and Hong Kong in 2009-10 and 2010-11.
- Export-import ratios show that among its top 15 trading partners, India had bilateral trade surplus with five countries, namely the UAE, USA, Singapore, UK and Hong kong.
- Foreign exchange reserves are an important component of the BoP and an essential element in the analysis of an economy’s external position. India’s foreign ex-change reserves comprise Foreign Currency Assets (FCA), gold, Special Drawing Rights (SDRs) and Reserve Tranche Position (RTP) in the Inter-national Monetary Fund (IMF).
- In terms of the destination of FDI flows Delhi, parts of U. P. and Haryana, Maharashtra, Dadra and Nagar Haveli and Daman and Diu accounted for almost 50% of the total inflows.
- Amid dwindling interest in SEZs, the government announced a ‘package of reforms’ on April 18, 2013, including easing of land requirement norms and an exit policy, to rekindle investor interest in Special Economic Zones.
- The Special Economic Zones (SEZs) Policy supported by the SEZ Act 2005 and SEZ Rules 2006 intends to make SEZs an engine for economic growth supported by quality infra-structure, complemented by an attractive fiscal package, both at the Central and State levels and with the single-window clearance mechanism.SEZ Norms Liberalised
- The Minimum Land Area Requirement for SEZ has been reduced by half for different categories of SEZs,
- For multi-product SEZ, minimum land requirement has been brought down from 1000 hectare to 500 hectare and for Sector-Specific SEZs, it has been brought down to 50 hectare.
- Also, there would be no minimum land requirement for setting up IT/ITES SEZs, besides easing of minimum built up area criteria.
- The Government has decided to allow transfer of owner-ship of SEZ units including sale.
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SEZs Scenario (As on September 2016) |
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| Approved SEZs | 408 |
| Notified SEZs | 346 |
| Operational SEZs | 204 |
| Total Units Approved | 4166 |
Among sectors attracting high cumulative FDIs, Services Sector retained the first spot, followed by construction development for the period April 2000 to March 2016.
- The World Bank’s concessionary lending arm, the International Development Association (IDA), which helps the world’s poorest countries, committed 17·7 per cent of its total aid, amounting to $ 2·6 billion, to India in 2009-10.
- Asian Development Bank (ADB) has approved $ 132 million ( 585 crore) loan for upgrading electricity system in Bihar and also a loan package of $ 120 million ( 532 crore) to Assam towards efforts to combat flood-ing and erosion.
- All the 8 Export Processing Zones (EPZs) located at Kandla and Surat (Gujarat), Santa Cruz (Maharashtra), Cochin (Kerala), Chennai (Tamil Nadu), Visakhapatnam (Andhra Pradesh), Falta (West Bengal) and Noida (U.P.) have been converted into Special Economic Zones.
- India’s external debt stock increased to $ 456·1 billion at end-December 2016.
At end-December 2016
* External Debt —$ 456·1 billion
* Total External Debt to GDP (2015-16) —23·5%
* Debt Service Ratio (2015-16) —8·8%
* Concessional Debt to Total external debt —9·2%
* Foreign Exchange Reserves to total external debt —78·7%
* Short term External Debt to total Debt —18·4%
* Short term External Debt to Foreign Exchange Reserves —23·4%
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