Scribd Logo
Upload

Welcome to Scribd!

  • 110 views

    Direction of India's Foreign Trade

    Uploaded by

    Anil B Malali
    1. India's foreign trade has traditionally been directed towards OECD countries like the US, EU, and Japan, but more recently developing countries in Asia have become larger trading partners. 2. The share of exports to OECD countries has declined from 56% in 1990-91 to 44% in 2005-06, while exports to developing Asian countries has increased from 17% to 39% over the same period. 3. Imports have similarly shifted away from traditional partners like OECD and Eastern Europe towards developing countries in Asia and Africa, which now account for 26% of imports compared to 18% in 1990-91.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd

    Direction of India's Foreign Trade

    Uploaded by

    Anil B Malali
    110 views4 pages
    1. India's foreign trade has traditionally been directed towards OECD countries like the US, EU, and Japan, but more recently developing countries in Asia have become larger trading partners. 2. The share of exports to OECD countries has declined from 56% in 1990-91 to 44% in 2005-06, while exports to developing Asian countries has increased from 17% to 39% over the same period. 3. Imports have similarly shifted away from traditional partners like OECD and Eastern Europe towards developing countries in Asia and Africa, which now account for 26% of imports compared to 18% in 1990-91.

    Original Description:

    Note on Direction of India's Foreign Trade

    Original Title

    Direction of India's foreign trade

    Copyright

    © © All Rights Reserved

    Available Formats

    DOCX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    1. India's foreign trade has traditionally been directed towards OECD countries like the US, EU, and Japan, but more recently developing countries in Asia have become larger trading partners. 2. The share of exports to OECD countries has declined from 56% in 1990-91 to 44% in 2005-06, while exports to developing Asian countries has increased from 17% to 39% over the same period. 3. Imports have similarly shifted away from traditional partners like OECD and Eastern Europe towards developing countries in Asia and Africa, which now account for 26% of imports compared to 18% in 1990-91.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    110 views4 pages

    Direction of India's Foreign Trade

    Uploaded by

    Anil B Malali
    1. India's foreign trade has traditionally been directed towards OECD countries like the US, EU, and Japan, but more recently developing countries in Asia have become larger trading partners. 2. The share of exports to OECD countries has declined from 56% in 1990-91 to 44% in 2005-06, while exports to developing Asian countries has increased from 17% to 39% over the same period. 3. Imports have similarly shifted away from traditional partners like OECD and Eastern Europe towards developing countries in Asia and Africa, which now account for 26% of imports compared to 18% in 1990-91.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    Introduction to Direction of India's Foreign Trade

    By direction of trade we mean the countries with which India keeps international
    trade relations. It also helps us to understand the diplomatic relations maintained
    by India with other countries in direction of trade.

    For the purpose of direction of trade, the countries to which India exports are
    broadly divided into following five groups.

    Direction of India foreign trade changes in import and export

    The group of countries to which India Exports are :-

    Organisation for Economic Co-operation & Development (OECD) comprising of


    USA, Canada, European Union (EU), Australia and Japan.

    Organisation of Petroleum Exporting Countries (OPEC) which includes Kuwait,


    Iran, Iraq, Saudi Arabia and others.

    Eastern Europe which includes Romania, Russia and others.

    Developing Nations which includes China, Hong Kong, South Korea, Singapore
    and Malaysia.

    Direction of India's Exports

    Direction of India foreign trade changes in export table


    The above table reveals following changes in India's Exports :-

    1. OECD

    The OECD group accounted for a major portion of India's exports. The share of this group
    was 56.4% in 1990-91 & 44.3% in 2005-06. About 45% of these exports have been to
    European Union (EU) countries.

    2. OPEC

    The share of OPEC which was 5.6% in 1990-91. In 2005-06 it has increased to 14.8% i.e.
    share of OPEC has been showing an upward trend since 1990-91.

    3. Eastern Europe

    There was a rapid decrease in the share of Eastern Europe particularly U.S.S.R. Due to
    political problems & disintegration of the U.S.S.R, the share of Eastern Europe decreased
    from 17.9% in 1990-91 to 1.9% in 2005-06.

    4. Developing Countries

    The share of developing nations increased from 17.1% in 1990-91 to 38.7% in 2005-06.
    Asian countries now account for 1/4th of India's export earnings. Among the Asian countries
    the major export destinations have been Hong Kong, Singapore & Thailand.

    5. Other Countries

    The share of other countries has declined from 3.00% in 1990-91 to 0.3% in 2005-06.

    Important Facts of India's Country Wise Exports

    1. The share of U.K in India's exports declined from 26.9% in 1960-61 to 4.5% in 2004-
    05.
    2. The share of USA in India's exports was 16% in 1960-61 and it rose to 16.7% in
    2004-05. India was dependent on U.K and U.S.A for 43% of its export earnings in
    1960-61. US to be the single largest trading partner for India but with a declining
    trend.
    3. The share of U.S.S.R. (Russia) rose from 4.5% in 1960-61 to 18.3% in 1980-81 but
    declined to 0.8% in 2004-05 due to the disintegration of U.S.S.R. Between 1986-90,
    the first position was occupied by U.S.A, second position by U.S.S.R and the third
    position by Japan. The position changed markedly after the disintegration of U.S.S.R.
    4. In the recent years, export to East Asian Countries has increased, mainly Hong Kong,
    Singapore and Thailand.
    5. There has been a healthy growth of bilateral trade between India and China. In the
    first seven months of 2002-03, Indo-China bilateral trade expanded by 43.4%. China
    is the second largest trading partner for India next to USA.
    Direction of India's Imports

    Since the last decade, there has been a distinct shift in the direction of trade. The share of
    OECD countries both in exports & imports is on the decline. Eastern Europe is no more a
    major partner in our trade. Its share has reached the lowest among the group. The Asian
    developing countries are becoming important trade partners.
    Direction of India foreign trade changes in import table

    The above table reveals following changes in India's Imports :-

    1. OECD - Organisation for Economic Co-operation and Development


    The share of OECD in India's import expenditure declined from 54% in 1990-91 to 32.73%
    in 2005-06. Thus the importance of OECD declined over the period 1990-91 to 2005-06.

    2. OPEC - Organisation of Petroleum Exporting Countries

    OPEC mainly include Iran, Iraq, Kuwait and Saudi Arabia. The share of OPEC countries
    decreased from 16.3% in 1990-91 to 7.7% in 2005-06 mainly because of crude oil. There has
    been a change in the source of oil imports from OPEC to other countries.

    3. Eastern Europe

    This includes mainly the former USSR. India's share of imports from Eastern Europe has also
    declined from 7.8% in 1990-91 to 2.6% in 2005-06. This is mainly due to decline in imports
    from Russia.

    4. Developing Nations

    This includes the developing countries of Africa, Asia, Latin America and Caribbean. The
    share of developing nations in India's import expenditure increased from 18.4% in 1990-91 to
    25.9% in 2005-06.

    5. Other Countries

    The share of other countries increased from 3.5% in 1990-91 to 31.1% in 2005-06.
    Important Facts of India's Country Wise Imports
    1. The share of U.S.A in India's imports was 29.2% and that of U.K was 19.4% in 1960-
    61. U.S.A. ranked first and U.K ranked the second. During the whole planning period,
    India has obtained maximum imports from U.S.A.
    2. With the emergence of new trading partners like Japan, Germany and Canada the
    dependence on U.K. declined. The share of U.K. in Indian imports declined from
    19.4% in 1960-61 to 3.2% in 2004-05.
    3. Trade with Japan increased in absolute terms and India has now entered in to a
    number of collaborations with Japan. The percentage share of Japan has decreased
    from 5.4% in 1960-61 to 2.8% in 2004-05.
    4. Trade with USSR occupied the second place next to USA, during 1984. The share of
    USSR increased from 1.4% in 1960-61 to 10.4% in 1984-85. With the disintegration
    of USSR, the share of Russia fell to 1.2% in 2004-05. The directions has now changed
    markedly.
    5. The share of developing countries has constituted more than 1/4th of total imports in
    2004-05 of these imports from Asian countries are most important.

    Conclusion on Direction of India's Foreign Trade

    Significant changes have taken place in the direction of India's foreign trade since 1991, and
    more particularly during the last two-three years. What's most significant is the emergence of
    China, Singapore, Hong Kong, South Korea & Malaysia as important trading partners of
    India from the Asian region, Switzerland from OECD countries, and UAE & Indonesia
    (which left OPEC in 2008) from OPEC countries.
    However, India should cultivate more trade relations with Africa, South America and Middle-
    East Asian Countries as these rich countries would offer huge markets for India's export.
    The diversification of India's exports has fetched a cheaper source of imports and a bigger
    market for exports. India has established herself in the highly competitive world market in the
    recent years.

    You might also like