Scribd
Upload
15 views4 pages

Foreign Trade

The document discusses the composition and destinations of India's merchandise exports and imports from 1960-61 to 2010-11. It notes that the share of agriculture and manufactured goods in exports has declined while fuels have increased. Major export destinations discussed are the EU, US, and Asian countries. Import composition and sources are also analyzed.

Uploaded by

Shreya Tibrewal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
15 views4 pages

Foreign Trade

The document discusses the composition and destinations of India's merchandise exports and imports from 1960-61 to 2010-11. It notes that the share of agriculture and manufactured goods in exports has declined while fuels have increased. Major export destinations discussed are the EU, US, and Asian countries. Import composition and sources are also analyzed.

Uploaded by

Shreya Tibrewal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
You are on page 1/ 4

Foreign Trade

1
Composition of India’s Merchandise Exports
• An examination of the composition of foreign trade of a country enables us to analyze
the rate and speed of structural changes operating in it.
1. A decline in the importance of agriculture and allied products.
• There is a small fall in the share of agriculture from 2000 to 2013-14.
2. Manufactured Products:
• There is a 15.1% fall in the share of manufactured products from the year 2001
to 2013-14. The fall in the share of export of manufactured products is mainly
on account of fall in export shares of the items to a major destination like USA.
• The share of manufactured goods in India’s total exports in 1960-61 was nearly
45.3% which mainly composed of textile fabrics and manufactures, cotton yarn,
fabrics, made up etc. and jute manufactures, and leather and leather products.
But with the development of the indigenous industries consequent the non-
traditional items gained importance in the export basket.
3. Between 2000-01 and 2010-11, the share of mineral fuels and lubricants has
increased
• Between 2000-01 and 2010-11, the share of mineral fuels and lubricants has
increased almost four times (from 4.3% to 16.8%). This is primarily due to
opening of new and growing markets in developing countries of Asia (China )
for mineral fuels.
Destinations of India’s Merchandise Exports

1. India-EU relations:
• India was among the first countries to develop diplomatic relations with the
European Economic Community (EEC). (1960-61-36.2%; 18.7% in 2010-11)
2. US:
• US has remained one of India’s major trading partners over the years, though
the improvement in trade relations between these two countries has been
punctuated due to political as well as economic reasons. The US is also the
primary source of India’s foreign investments, the first resort for \technology
acquisition, and significant source of funds and aid support.
• In 1960-61, the share of the US in India’s total exports was 16%. In 2000-01,
the US accounted for more than one-fifth of India’s merchandise exports.
India’s economic reforms in 1991, together with the collapse of the Soviet
Union, and a new desire for strengthening relations between these two
economies (India and the US) set the stage for a new paradigm in economic
interaction. However, like the other developed countries, the

2
• importance of the US as a destination of India’s exports has started to decline
in the 2000s. The percentage share destined for the US has declined from 20.9%
in 2000-01 to10.2% in 2010-11.
3. OPEC
• Among OPEC nations, the most spectacular rise in share has been observed for
U.A.E. which has increased from 2.4% to 13.7% between 1990-91 and 2010-
11.
4. Asia
• Among the developing countries, the Asian countries account for more-than one
fourth of India’s total exports, particularly in the decade of the 2000s. Many
new Asian developing economies emerged as trade partners, prominent among
them being China, Singapore and Malaysia. Most of these countries emerged as
strong trading partners, particularly after 1995-96 when the policy of trade
reform was getting impetus along with the ‘Look East Policy’ of the
Government through which sustained effort was made to develop strong
relations with China and the ASEAN

Composition of India’s Merchandise Imports


• Imports are classified into three categories: food and live animals, raw materials and
intermediates, and capital goods.
• 1. The import share of foods and live animals category declined sharply from
19.0% in 1960-61 to 3.0% in 1980-81. Imports of food grains are virtually
eliminated as the country has become self-sufficient in food grains and
accumulated large reserves.
• 2. The share of raw materials and intermediate goods, increased from 46.9% in
1960-61 to 62.4% in 2010-11. The share of this group increased more sharply
in the pre-reform period on account of industrialization and export promotion,
touching 77.7% of total imports in 1980-81.
• 3. The import share of POL increased to as high as 41.9% in 1980-81 but
thereafter its share declined in total imports and throughout 2000s the share
remained stable around 30%.
• 4. In case of capital goods, the share in total imports declined from 31.7% to
13.2% between 1960-61 and 2010-11. Both non-electric and electric machinery
product groups have declining import share during the pre-reform and reform
periods.

3
Destinations of India’s Merchandise Imports
• Sources of India’s Merchandise Imports
• Traditionally, Germany, Japan, the UK and the US were the important trade
partners of India. However, the importance of these countries has subsided in
terms of their market share.
• The new import partners from the developing countries of Africa and Asia have
emerged and are increasingly gaining importance as sources of India’s import
in the reform period. In fact, subsequent to the opening up, India’s imports are
being sourced from a wider range of countries.
• the import share of developing countries increased from 18.7% to 34.2%
between 1990-91 and 2010-11. Among the developing nations, the share of
Asian countries increased from 14.0% to 21.7% over these years.
• China: India’s import from China expanded significantly from 0.1% in
1990-91 to 11.8% in 2010-11. The share of imports coming from OPEC rose
from 16.3% in 1990-91 to 32.3% in 2010-11. However, its share declined
significantly during first half of the 2000s.

You might also like