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CHAPTER I

REVIEW OF INDIA’S FOREIGN TRADE:


TRENDS AND POLICIES
I. Introduction
1.1 Importance of Foreign Trade for a Developing Economy
Foreign Trade is a vital sector of a country's national economy, and
contributes substantially to the economic welfare of the people and the
development of resources. Economies of scale and international specialisation as
also the fruits of scientific and technological progress in the world become more
easily accessible through the foreign trade1. In the context of planned economic
development of developing nations, an appropriate trade policy has become very
necessary and significant. Today no country in the world is self-sufficient in the
sense that it does not possess facilities for economical production of all the goods
and services that are consumed by its people. Probably no country can produce all
the goods that it needs. Therefore, there is need to trade with others.2 Developing
countries need more goods to feed a rapidly growing population. Exports can be a
leading sector in growth.3 This means that increased earnings from higher
marketability of a country's commodities in the international market would
stimulate the indigenous industrial activity in the country. This in turn brings many
distinct benefits, viz., greater utilisation of resources, larger employment
opportunities, more foreign exchange, etc. Scholars stated that trade would make
the country as a whole better off.4 Foreign trade would make an impressive
contribution to a country's development. It is considered to be not simply a device
for achieving productive efficiency; but it is also an engine of growth.5 When trade

1 Agarwal, A.N. (1975), Indian Economy: Problems of Development and Planning, Vikas Publishing House
Pvt. Ltd., New Delhi. p. 577.
2 Morton & Tulloch (1978), Trade and Developing Countries, The Overseas Development Institute, London,
pp. 16-17.
3 Kindleberger , Charles P. (1976), International Economics, D. B.Taraporevala Sons & Co. Pvt. Ltd.,
Bombay, p.20.
4 Bo Soder (1974), International Economics, Macmillan, London, p.1.
5 Meier, Gerald M. (1980), Development through Trade, Oxford University Press, London, p. 214.
2

is introduced into a primitive economy, it acts as a dynamic force widening the


extent of the market and the scope for "division of labour.6
Foreign trade also facilitates the dissemination of technical knowledge,
transmission of ideas, and import of know-how/skills, managerial talents, and
entrepreneurship. In addition, foreign trade encourages movement of foreign
capital. In totality, foreign trade can have a profound impact on the growth of an
economy in terms of production, employment, technology, resource utilisation,
and so on.
It is generally agreed that a country's economic position depends in some
measure upon the character of its economic dealings with other countries.7 India
cannot remain in isolation in today's world, even in the matter of development of
its own economy, as the latter is inextricably inter-linked with direct and indirect
consequences of what happens in, and in relation to, the rest of the world. In this
context, one of the important economic aspects of development is international
trade, which is linked with the World Trade Organisation (WTO), and Foreign
Direct Investment (FDI). An economy which has decided to embark on a
programme of development is required to extend its productive capacity at a fast
rate. For this, it is essential to import machinery and equipment which cannot be
initially produced in the country. Such imports either help to create new capacity
in some lines of production or enlarge capacity in the other lines of production.
They are called developmental imports. These imports are vital for a developing
economy as many of the industrial projects are also held up for lack of
maintenance imports. Such imports are anti-inflationary because they reduce the
scarcity of consumer goods. There are a number of instances which necessitate
import of raw materials, parts and components, semi-finished goods, and finished
products needed for developmental purposes in industry and service sectors.
Import of capital, technology and skilled manpower is also necessary at various
stages of development. It is, therefore, inevitable that during the early years of
development, imports have to be increased. It is natural that the balance of trade in

6 Robert Heller, H.K. (1973), International Trade : Theory and Empirical Evidence, Prentice-Hall of India Pvt.
Ltd., New Delhi, p. 233.
7 Lorie Tarshis (1975), Introduction to International Trade and Finance, John Wiley & Sons, New York.
3

such a situation will turn heavily against the developing countries, and become
adverse. This necessitates the enlargement of exports. External assistance can help
to share the burden of growth in the short-run, but in the long period, the
developing country itself has to bear the burden of development. To meet the
growing foreign debt in view of inelastic imports, a developing country must
necessarily increase its exports. Imports and exports are, thus, complementary, and
need to be pursued vigorously by all countries at various stages of development
1.2 Trade Development Efforts in India
The formulation of a new foreign trade policy with an objective to use it as
an economic and foreign policy tool reflects the change in the perception towards
the external sector, and its role in the overall strategy of development. Though the
process of trade liberalisation in India has been underway for over two decades,
the trade policy measures initiated since 1991 as a part of the economic reforms
process have been more comprehensive. The chapter reviews the foreign trade of
India through trends and policies in the recent post-reform period from early
1990s. Section I covers the trends in terms of percentage change of imports and
exports from early 1990s, followed by composition commodity group-wise, and
direction region-wise and for specific countries. Section II presents the foreign
trade policies 2004-09, 2009-14, annual policy supplement of 2010, and stimulus
measures announced by Government of India and Reserve Bank of India in the
context of the global melt down that affected India’s trade sector from the second
half 2008-09. Section III deals with impact of the Global Financial Crisis on India
through trade channel covering exports and imports referring to trend, composition
and direction. In order to further ascertain the role of trade channel in India’s
growth, the firm-level export orientation information has been examined based on
the database of the Centre for Monitoring Indian Economy (CMIE), Mumbai.
Section IV presents heartening Rebound in World Trade.
The Indian development strategy recognised the significance of liberal trade
policy in the early 1980s, which was manifested in the form of a number of
important recommendations made at that time by several Committees. The notable
ones focussed on a shift in emphasis from control to deregulation through
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simplification in import licensing system (Alexander Committee, 1978), clear


recognition of dynamic comparative advantages associated with export growth
(Tandon Committee, 1980), the need to harmonise foreign trade policies with the
other macroeconomic policies, advantages of an export-led growth strategy, a
phased reduction in effective protection (Abid Hussain Committee, 1984), and the
need to discourage inefficient import substitution (Narasimham Committee, 1985).
Notwithstanding these concerns, the trade regime continued to be characterised by
a licensing system which together with a high tariff structure protected the
economy from external competition. In addition, the trade performance was
constrained by restrictive foreign investment policies (RBI, 1999).
The process of trade liberalisation, however, gathered momentum only
during the 1990s in the aftermath of the external payments crisis. The policy
measures undertaken aimed at making domestic industry cost-efficient by
enhancing efficiency in resource use under international competition, which was
expected to derive a better export performance in the long-run. The major trade
policy changes in the post-1991 period included simplification of procedures,
removal of quantitative restrictions, and substantial reduction in the tariff rates as
also their dispersion as recommended by the Tax Reforms Committee, 1992
(Chairman: Raja J. Chelliah). Furthermore, the reach of the export incentives was
broadened, extending the benefits of various export-promotion schemes to a large
number of non-traditional and non-manufactured exports. Following the
announcements in the Export Import (EXIM) policies, various changes were
effected such as the removal of quantitative restrictions, strengthening the export
production base, removal of procedural bottlenecks, technological upgradation,
and improvement of product quality. Various steps were also taken to promote
exports through multilateral and bilateral initiatives, including identification of
thrust areas and focus regions. The policy stance also marked a move away from
the provision of direct export subsidy to indirect promotional measures. India also
took several policy initiatives at the multilateral levels for tariffication of the non-
tariff barriers. As per India’s commitment to the World Trade Organisation
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(WTO), India agreed to the phased removal of all balance-of-payments (BoP)


related quantitative restrictions by end-March 2001, and acted accordingly.

II. India’s Foreign Trade Trends


1.3 Trends
The impact of trade reforms is evident from the changing structure of
India’s Foreign Trade in terms of diversity of market and products, and also in the
form of higher degree of trade openness (resulting from higher export growth and
the associated increase in the capacity to import).
Tables 1.1(A) and 1.1(B) present the trends in India’s exports and imports
over years in terms of Rs. crore, and US $ million, respectively. Table 1(C)
presents the annual and monthly figures of recent years in US $ million. Figure 1.1
presents the trend of growth rates of exports and imports of 2000-2010. Figure 1.2
presents the month-wise growth rates of exports and imports for two years, 2008-
09 and 2009-10. Growth rates referred to in the context of exports and imports are
in US $ terms. During the 1990s, Indian exports have performed well in certain
years, and not so well in a few other years. Using the method of least squares to
find a regression line, trend lines of various parameters have been drawn based on
the time series data for the country’s exports and imports for different periods.
These are given in figures 1.3 and 1.4. The growth rate was high in 1993-94, 1994-
95 and 1995-96 at 20%, 18.4%, and 20.8%, respectively, but declined sharply in
1996-97 to 5.3%, and became negative in 1998-99 at (-)5.1% on account of the
South East Asian crisis and world wide recession. It again recovered to 10.8% in
1999-2000, and reached the highest growth rate for the decade at 21% in 2000-01.
However, the global economic slow down and the events of September 11, 2001
led to a steep fall in the rate of growth of exports during 2001-02 (-1.6%).
Liberalisation and trade reforms have also led to a compositional change in India’s
export basket. Analysis of our export basket indicates an increase in the share of
manufactured goods along with an overall widening and diversification of exports.
The period since 2002-03 has recorded a steady export growth rate above 20% up
to 2007-08; the highest performance during these years being 2004-05 at 30.8%,
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and 2007-08 at 29%. Compound annual growth rate (CAGR) in US $ terms for
1994-2000 for exports was 6.94%, for 1999-2005 17.80%, for 1994-2005 12.24%,
for 2004-09 22.04%, and for 2002-08, the highest average performance was
25.35%. For the first time, India’s exports crossed US $100 billion in 2005-06, and
recorded US $103.09 billion; and later reached a record level of US $185.3 billion
in 2008-09 (13.6% growth rate). It declined and turned negative in 2009-10 at
(-)3.6%., in view of the global meltdown. The deceleration started from September
2008 and negative growth was recorded from October 2008 up to September 2009
(twelve consecutive months), as shown in Table 1(C) and Figure 1.2.
Imports crossed US $100 billion for the first time in 2004-05, and has
grown steadily thereafter. Percentage growth was 42.7 in 2004-05, 33.8 in 2005-
06, and 35.5% in 2007-08. Deceleration started from October 2008, and led to low
growth rate of 20.7% in 2008-09, and negative growth rate of (-)5.6% in 2009-10.
Pearson’s Correlation Coefficient between growth rates of exports and imports for
the period 1994-95 to 2009-10 is 0.8671 (Table 1.1 B). The result is quite high and
positive, indicating that both the growth rates move in the same direction, and
quite often import growth rate tends to be higher than export growth rate. Negative
growth rate of imports was recorded for eleven consecutive months from
December 2008 to October 2009, as shown in Table 1.1(C) and Figure 1.2.
Performance of exports and imports in recent years along with per cent
change over the previous year is as follows:
Text Table 1.1: Performance of Exports and Imports (1990-2010)
% change over Imports % change over
Exports (US
Year the previous (US $ the previous
$ billion)
year billion) year
1 2 3 4 5
1990-91 18.14 9.2 24.08 13.5
1994-95 26.33 18.4 28.65 22.9
1999-2000 36.82 10.8 49.67 17.2
2002-03 52.72 20.3 61.41 19.4
2003-04 63.84 21.1 78.15 27.3
2004-05 83.54 30.8 111.52 42.7
2005-06 103.09 23.4 149.17 33.8
2006-07 126.41 22.6 185.74 24.5
2007-08 163.13 29.0 251.65 35.5
2008-09 185.30 13.6 303.70 20.7
2009-10 178.66 -3.6 286.82 -5.6
7

Trend lines have been drawn based on linear regression equations for
exports and imports for 1995-2010 and 1998-2009, as shown in Fig.1.3 and 1.4,
respectively. Linear trend based on least squares method has been considered.
Annual average increase for the two periods for exports and imports, is as follows:
For 1995-2010 trend line, exports: US $11,604 million; imports: US
$19,321 million;
For 1998-2009 trend line, exports: US $15,096 million; imports: US
$25,143 million.
Performance during 1998-2009 is better compared to the longer period.
Imports have all along been higher than exports, resulting in trade deficit.
Exports as per cent of Gross Domestic Product (GDP) improved from 5.72
in 1990-91 to 8.95 in 1995-96, 9.58 in 2000-01, 12.73 in 2005-06, and 16.0 in
2008-09.
Simultaneously imports as per cent of GDP improved from 7.59 in 1990-91
to 10.33 in 1995-96, 10.86 in 2000-01, 18.41 in 2005-06, and 26.2 in 2008-09.
Total foreign trade of the country (consisting of merchandise exports and imports)
as per cent of GDP moved up from 13.32 in 1990-91 to 19.28 in 1995-96, 20.44 in
2000-01, 31.14 in 2005-06, 42.2 in 2008-09, and 36.7 in 2009-10 (Tables 1.1A and
1.1B). Exports as per cent of imports fluctuated from time to time. It was 75.4 in
1990-91, 86.7 in 1995-96, 88.2 in 2000-01, 69.1 in 2005-06, 61.2 in 2008-09, and
62.3 in 2009-10. From 2003-04, growth rate of imports has been higher than that
of exports. It was sluggish in a number of earlier years. The Foreign Trade policy
(FTP) (2004-09) envisaged doubling of India’s share in world exports from 0.75
per cent in 2004 to 1.5 per cent by 2009. However, as revealed by later
developments, doubling of India’s share in global trade has been deferred to 2020
as a long term objective, and doubling of India’s exports of goods and services by
2014 as another goal. India’s share in world exports remained at 1.1 per cent from
2006. It was 0.7 per cent in 2000. Exports plus imports of goods and services as
per cent of GDP improved from 17.2 in 1990-91, 25.5 in 1995-96, 29.2 in 2000-
01, 43.8 in 2005-06, 53.7 in 2008-09, and 48.4 in 2009-10. Greater degree of
integration with the world economy through foreign trade consisting of export and
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import of merchandise goods, and services is thus evident. This has offered many
advantages, and has also landed the country in troubled waters in certain periods as
noticed from September 2008.
Both external and domestic factors have contributed to the satisfactory
performance of exports since 2002-03. While improved global growth and
recovery in world trade aided the strengthening of Indian exports, firming up
domestic economic activity, especially in the manufacturing sector, also provided a
supporting base for strong sector-specific exports. Various policy initiatives for
export promotion and market diversification seem to have contributed as well. The
opening up of the economy and corporate restructuring have enhanced the
competitiveness of Indian industry. India’s impressive export growth has exceeded
world export growth in most of the years since 1995; but since 2003, it has lagged
behind the export growth of developing countries taken together, mainly because
of china’s explosive export growth.
Despite the demand induced moderation in export growth resulting from the
global recession, India’s exports performed relatively better as its rank among
leading exporters improved from 27th in 2008 to 22nd in 2009, with the share in
world exports at 1.2 per cent. India ranked 15th among leading importers in 2009,
with a share of 1.9 per cent, which also represents an improvement over 16th
position in 2008. Since India’s GDP growth remained ahead of most of the
countries, its import growth would have been relatively higher, leading to higher
rank among importers. (RBI, Annual Report 2009-10, p. 68).
India’s exports and Imports contracted by 3.6 per cent and 5.6 per cent,
respectively during 2009-10 as against a growth of 13.7 per cent in exports, and
20.8 per cent in imports in the previous year. As the decline in imports was
steeper than decline in exports, the overall trade deficit was lower during 2009-10.
On balance of payments basis, the trade deficit as a percentage of GDP was
reduced from 9.8 per cent in 2008-09 to 8.9 per cent in 2009-10 (RBI, Annual
Report 2009-10, p. 68).
India’s share in world merchandise exports, after remaining unchanged at
1.1 per cent between 2007 and 2008, reached 1.2 per cent in 2009 mainly due to
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the relatively greater fall in world export growth. The increase in China’s share of
world exports between 2000 and 2008 at 5.0 percentage points is around 39 per
cent of the total increase in the share of emerging and developing countries over
this period. However, China’s export growth rate which was above 25 per cent in
this decade till 2007 moderated to 17.3 per cent in 2008, and declined to (-) 21.7
per cent in the first half of 2009, as a result of global recession. Although India’s
export growth was also negative at (-) 18.4 per cent in the first half of 2009, it was
lower than the negative growth of the other major emerging and developing
countries, and other select countries except Hong Kong. However, in absolute
terms, India is way behind China with its exports constituting only 12.4 per cent of
China’s in 2008. While India’s exports were higher than those of China till 1954,
they started lagging thereafter. Ironically the gap started widening since the 1990s,
the period of India’s reforms. In 1990, the shares in world exports of China and
India were 1.8 per cent and 0.5 per cent respectively; and in 2008, their respective
shares stood at 8.9 per cent and 1.1 per cent. This growing gap between India and
China calls for greater introspection on the part of India. (GOI, Economic Survey
2009-10, p. 155).
India’s merchandise imports were also affected by the global recession
though with a slight lag, and grew by 20.7 per cent to US $ 303 billion in 2008-09.
This was due to the moderate growth of 23.5 per cent in import of non-petroleum,
oil and lubricants (non-POL) products; and was low mainly due to both low
volume growth by 6.2 per cent and low growth of import price of the Indian crude
oil import basket by 5.5 per cent.
International oil prices recorded unprecedented rise during 2008, and
remained considerably volatile during the entire ensuing period. The price of
Indian basket of crude oil which moved in tune with international oil prices was
also volatile, averaging at US $83.57 per barrel during 2008-09 after reaching an
unprecedented US $142 per barrel on July 3, 2008 before declining sharply
following the global recession.
Non-POL non-bullion imports grew by 23.6 per cent in 2008-09 reflecting
relatively low demand for imports for industrial activity, partly due to low
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industrial growth and partly due to the use of inventories, and also for imports used
as inputs for exports due to fall in global demand following the world economic
recession. (GOI, Economic Survey 2009-10, p. 155).
During 2009-10 import growth was negative at (-) 5.6 per cent accompanied
by a decline in both POL and non-POL imports at (-) 7.0 per cent and (-) 4.9 per
cent, respectively.
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Fig.1.1: Export and Import Growth Rates for values in US $ million (2000-10)
[Source: Table 1.1.(B) ]
(in per cent)

Year Exports Imports


1 2 3
2000-01 21.0 1.7
2001-02 -1.6 1.7
2002-03 20.3 19.4
2003-04 21.1 27.3
2004-05 30.8 42.7
2005-06 23.4 33.8
2006-07 22.6 24.5
2007-08 29.0 35.5
2008-09 13.6 20.8
20009-10 -3.6 -5.6

50.0

40.0

30.0
%

20.0

10.0

0.0
2000- 2001- 2002- 2003- 2004- 2005- 2006- 2007- 2008- 20009-
01 02 03 04 05 06 07 08 09 10

-10.0
Exports
Imports
12

Fig 1.2: Month-wise Variation in Export and Import in 2008-09 and 2009-10 over the
corresponding month of the previous year (Values in US $ million)
[Source: Table 1.1(C)]
(in per cent)
Month Exports Imports Month Exports Imports
1 2 3 1 2 3
2008-09 2009-10
April 63.0 65.0 April -32.4 -36.6
May 50.0 39.2 May -34.1 -32.0
June 58.5 44.6 June -29.1 -20.5
July 52.1 49.7 July -24.6 -31.4
August 40.5 64.6 August -23.5 -33.1
September 26.1 70.9 September -7.3 -31.1
October -3.7 18.5 October 4.8 -1.9
November -13.5 6.3 November 33.8 5.5
December -8.6 -3.3 December 23.5 44.9
January -13.6 -20.2 January 21.0 38.5
February -21.0 -27.6 February 31.6 72.5
March -25.1 -29.6 March 56.2 77.1

100

80

60

40
%

20

0
Ma y

Ma y
h

h
Ju ly

Ju ly
Ap ril

Ap ril
b er

b er
a ry

a ry
ua ry

ua ry
st

st
Ju ne

Ju ne
m b er

r
er

r
-09

-10
m b er

r
mb e
M a rc

M a rc
mb e
em b e
A u gu

A u gu
em b
Oc t o

Ja nu

Oc t o

Ja nu
2 00 8

2 00 9
Fe b r

Fe b r
N ove

N ove
D ece

D ece

-20
Se pt

Se pt

-40

-60

Exports Imports
13

Fig.1.3: ## Overall Exports and Imports of India


Source: Table 1.1(B)

The Trend equations for Overall Exports and Imports of India in US $ million for the period
1995-96 to 2009-10 are given below:

Trend Equation R2 Sig Remarks


EXPORTS = - 11808 + 11604 t 84.6 0.000 Good Fit
IMPORTS = - 38602 + 19321 t 80.9 0.000 Good Fit

Fig.1.3: ##Trend lines fitted based on the derived trend values of overall Exports and Imports
of India

1. The annual average increase in Overall Exports of India is US $ 11,604 million.


2. The annual average increase in Overall Imports of India is US $ 19,321 million.
14

Fig.1.4: ## Overall Exports and Imports of India


Source: Table 1.1(B)

The Trend equations for overall Exports and Imports of India in US $ million for the period
1998-99 to 2008-09 are given below:

Trend Equation R2 Sig Remarks


EXPORTS = - 5442 + 15096 t 89.4 0.000 Good Fit
IMPORTS = - 29461 + 25143 t 84.8 0.000 Good Fit

Fig. 1.4:## Trend lines fitted based on the derived trend values of overall Exports and Imports
of India

1. The annual average increase in Overall Exports of India is US $ 15,096 million.


2. The annual average increase in Overall Imports of India is US $ 25,143 million.
15

1.4 Composition of Trade


An analysis of the shift in the composition of India’s commodity exports
reveals some interesting facts. Before the reforms, India’s exports were
significantly driven by exports of primary agricultural commodities and a few
manufacturing commodities such as textiles, and gems and jewellery; while the
commodity composition at the global level was shifting to technology–intensive
manufacturing commodities such as engineering goods and chemicals. The
reforms and favourable trade policy brought a shift in the composition of India’s
commodity exports. Technology-intensive exports comprising engineering goods
such as metals, machinery and transport equipment, and chemicals, including
pharmaceuticals emerged as the leading export sector for the country, signifying
rising prominence of exports in India’s GDP growth. Besides a shift towards
technology – intensive exports, exports of petroleum products (which showed
spectacular growth) emerged as a major contributor to total exports, reflecting the
impact of India becoming the sixth largest refinery in the world.
1.4.1 India’s Exports of Engineering Goods
During the reform period, India’s merchandise exports witnessed a notable
shift in terms of commodity composition, led by engineering goods. In an
environment of increasing openness of the economy and a supportive policy
framework since the early 1990s, exports of engineering goods accelerated from
US$ 1.2 billion (9.5 per cent of total merchandise exports) in 1987-88 to US$ 47.3
billion in 2008-09 (25.5 per cent of total merchandise exports). The rapid growth
of engineering goods exports at a trend growth rate of 27.7 per cent during 2001-
02 to 2008-09 was attributed to the growing competitiveness and increasing
technological sophistication of India’s manufacturing exports. In 2004-05,
engineering goods emerged as the largest item of manufacturing exports,
surpassing exports of textiles, and gems and jewellery. Within engineering goods,
transport equipment emerged as the key driver of exports growth, attributable to
the increasing global competitive advantage of India’s automotive industry.
According to the Automobile Component Manufacturers Association of
India (ACMA), since mid-1990s, India’s automobile industry has witnessed rapid
16

transformation from a low-volume and fragmented sector into a highly competitive


sector characterised by world class technology, large and assured volumes, and
strict delivery schedules in response to the demand from global vehicle
manufacturers. Further India’s automobile components industry is highly
diversified with a capacity to produce as many as 150 different products. The
technology intensity of India’s exports compared with the emerging economies in
East Asia and Latin America has the potential for substantial growth. However, in
terms of the global positioning of the automotive industry, the share of India’s
exports in the global automotive market remains very low (US $5 billion against
the world total of US $1234 billion, with Korea, Mexico, and China as world
leaders in that order). During 2001-07, India’s exports of machinery and transport
equipments posted a trend growth rate of 33.0 per cent compared with the global
trend growth rate of the sector at 12.1 per cent. Thus, the share of India’s exports
of machinery and transport equipment, and automotive components at the global
level increased from 0.10 per cent in 2000 to 0.33 per cent by 2007. According to
ACMA, the automotive components industry has to accelerate measures towards
improving quality and its competitive position in the global market (RBI. 2010.
Report on Currency and Finance 2008-09).

1.4.2 Composition of Imports by Broad Economic Categories (BEC)


There have been a number of subtle compositional shifts in imports within
the broad aggregation during the past decade that need to be recognised. For
instance, within petroleum imports, there has been a shift from petroleum products
to crude oil, following the large-scale increase in refinery capacity within the
country. Further, since 2001-02, India has transformed itself from a net importer
of petroleum products to a net exporter of the same. Another significant
development during the 1990s has been the channelising of gold imports through
official routes. Since 1997 when banks were allowed to import gold, the import of
gold through passenger baggage has declined significantly. Industries that have
shown the least import propensity since the 1990s and, thereby have gradually
been phased out of the import commodity basket, were mainly in the medium-to-
low technology, labour-intensive sectors. Similarly, industries with the highest
17

growth rate of imports in the past decade have been largely those with a medium-
to high-technology content that produced intermediary products needed for
exports.
The classification of imports as per BEC introduced by the UN shows that
most of India’s imports consist of intermediate goods followed by capital goods.
While the share of intermediate goods is still dominant, it fell from 83.5 per cent in
2001 to 76.8 per cent in 2006. In 2007, there was a marginal rise to 77.2 per cent.
Share of capital goods imports has increased from 8.9 per cent in 2001 to over 14
per cent in 2006 and 2007. The share of consumption and other goods is quite low;
Contrary to the general belief, not only is the share of consumer goods low, it has
fallen from 4.3 per cent in 2001 to 3.5 per cent in 2007.
The WTO’s “International Trade Statistics 2009” has indicates that
increasing trade in intermediate goods is one of the major reasons for world trade
experiencing larger changes than world GDP. The higher composition of
intermediate goods also has tariff policy implications as higher duties on these
items make our exports and manufacturing less competitive.
1.4.3 Export Diversification
In 2008, India had a global export share of 1 per cent or more in 42 out of a
total of 99 commodities at two digit Harmonised System (HS) level, but a
significant share of 5 per cent or more in eleven items. Three items, vegetable
textile fibres not elsewhere specified (n.e.s); paper yarn, woven fabric; vegetable
plaiting materials, vegetable products, n.e.s.; and residues, wastes of food industry
and animal fodder, had an increase in global share by 0.5 per cent point or more in
2008 over 2007. Four items lost global shares which include carpets and other
textiles floor coverings; other made textile articles, sets, worn clothing, etc; lac,
gums, resins, vegetable saps and extracts, n.e.s.; and pearls, precious stones,
metals, coins, etc. One item, namely, silk had stagnant growth. In the remaining
31 items, 10 lost their shares in 2008 over 2007.
While India has diversified its export basket as well as export markets, a
more systematic approach of diversification of dynamic products to developed
countries and non-dynamic products to developing countries could pay better
18

dividends (GOI, Economic Survery 2009-10).


A compositional change has been witnessed in the export basket with the
opening of the economy - Tables 1.4(A) and 1.4(B). The commodity composition
of our export basket can be divided into four main categories - agriculture and
allied products, ores and minerals, manufactured goods, and crude petroleum
products.
Text Table 1.2: Percentage Share of Principal Exports (in terms of US $ million)
Category 1995-96 2000-01 2005-06 2007-08 2008-09
1 2 3 4 5 6
Agriculture and allied products 19.1 13.5 10.2 9.9 9.1
Ores and minerals 3.7 2.6 5.2 5.5 4.2
Manufactured goods 74.7 78.0 72.0 64.1 66.4
Crude and petroleum products 1.4 4.2 11.5 17.8 14.9

The share of manufactured products has improved, along with crude


petroleum products. Decline in manufacturing goods share in recent years is due to
the increase in exports of crude and petroleum products. Shares of agriculture and
allied products, and ores and minerals have declined over years. Share of top five
commodity groups in India’s exports in US $ terms in 2008-09 is as follows, with
the share in 2007-08 given in brackets: engineering goods 22.5% (18.8%),
petroleum products 14.9% (17.8%), chemicals and related products 4.7% (4.7%),
gems and jewellery 15.1% (12.1%), textiles and clothing 8.1% (8.8%). Shift in
share in recent years is as follows.
Text Table 1.3: Shift in Percentage Share of Exports of Top Five Product Groups
Category 2000-01 2007-08 2008-09
1 2 3 4
Engineering goods 14.1 18.8 22.5
Petroleum products 4.2 17.8 14.9
Chemicals and related products 4.3 4.7 4.7
Gems and jewellery 16.6 12.1 15.1
Textiles 7.9 2.9 2.2
Readymade garments 12.5 5.9 5.9

1.5 Direction of Trade


During 2008-09, Asia and ASEAN region accounted for 58 per cent of
India’s total trade of exports and imports, and is India’s largest trading partner
region. Europe and America together accounted for around 43 per cent, with
America (North America, Latin America and Caribbean region) remaining stable
19

at 12.5 per cent. The regional direction of India’s exports has experienced
significant changes between 2000 and 2008. First, the share of India’s exports in
traditional markets such as the EU and North America witnessed a significant
decline. Second, there was a structural shift in favour of Latin America, ASEAN,
West Asia, North Africa and South Asia. In terms of growth, India’s exports to
developing countries accounted for the largest downturn to (-)0.5 per cent during
2008-09 from 33.6 per cent in 2007-08, which was mainly driven by a sharp fall in
exports to China. The second largest deceleration in growth of India’s exports was
to OECD countries during 2008-09. The US led the deceleration in exports to
OECD countries during 2008-09; nevertheless, the US continued to be the single
largest contributor to India’s exports. The increasing share of India’s trade with the
above regions could be attributed to factors such as the distance and size of the
economies as described in the Gravity Model of International Trade. The Model is
increasingly used to derive measures of divergence in the expected volumes of
trade between trading partners and their actual trade (ibid.).
Value of India’s imports from major regions / countries are given in Tables
1.5(A) and (B); and exports to major regions / countries are given in Tables 1.6(A)
and (B). Top 10 countries of India’s imports are listed in Table 1.5(C); and
similarly Top 10 countries of India’s exports are listed in Table 1.6(C).
The directional pattern of India’s total trade (imports and exports) has been
changing constantly during the decade with the share of the top 15 trading partners
increasing by 9.5 percentage points to 61.3 per cent between 2004-05 and 2008-09
(Table 1.8). In the first half of 2009-10, their share was 59.6 per cent. The major
development in the direction of India’s trade is that USA which was in the first
position in 2007-08 has been relegated to the third position in 2008-09, with UAE
becoming India’s largest trading partner, followed by China. However, in the first
half of 2009-10, with oil prices moderating, China has gained a slight edge over
the UAE to become India’s major trading partner.
According to the WTO’s “International Trade Statistics 2009”, the global
recession reduced the trade imbalances of many countries. Japan’s trade surplus
fell from 2.1 per cent of GDP before the crisis to 0.4 per cent in 2008, turning into
20

a trade deficit of 0.02 per cent of GDP during the first quarter of 2009. Germany’s
trade surplus of 8 per cent of GDP until 2008 fell to 7 per cent in 2008, and United
States’ trade deficit of 6.8 per cent of GDP in 2006 fell to 6.2 per cent in 2008, and
further to 3.4 per cent in the first quarter of 2009. For the BRIC (Brazil, Russia,
India, and China) countries, trade balance as per cent of GDP was more volatile
due to trade in primary commodities, Russia and Brazil being specific examples.
The report states that India has faced a structural deficit in merchandise trade that
has grown especially from 2000 onwards. China’s trade surplus of 7.6 per cent of
GDP in 2007 fell to 6.7 per cent in 2008, and 4.7 per cent in the first quarter of
2009, though initial monthly figures indicate that it is benefiting noticeably from
the initial recovery of trade. Export-Import ratios (Table 1.8) show that among its
top 15 trading partners, India had bilateral trade surplus with five countries,
namely the UAE, USA, Singapore, the UK and Hong Kong in 2008-09 and the
first half of 2009-10. India’s trade deficit with the USA and Singapore in 2007-08,
turned into trade surplus thereafter. The export-import ratio fell in 2008-09 in the
case of Hong Kong, though it recovered in the first half of 2009-10. The fall in
export-import ratio from 0.8 in 2004-05 to the present 0.3 in the case of China
needs special attention. Among the countries not in the top 15, Brazil is an
interesting case. India’s export-import ratio which had stabilised at above 2 till
2008-09 indicating a high trade surplus for India has suddenly turned into a trade
deficit at 0.64 in the first half of 2009-10. The disaggregated data for April-June
2009 indicate that this was probably due to the sudden fall in India’s exports of
refined POL to Brazil because of softening of crude oil prices and the sudden high
rise in import from Brazil of crude petroleum, besides sugar to meet domestic
needs. High growth in import of beverages, iron and steel, fats and oils from
Brazil also seems to have contributed to the trade deficit.
The UAE has displaced the USA as the topmost destination of India’s
exports in 2008-09 and 2009-10 (April-September) with an export share of 13.1
per cent and 14.4 per cent, respectively. India’s exports to all the top three export
destinations – the UAE followed by the USA and China – registered negative
growth of (-) 28.7, (-) 25.3 and (-) 21.9 per cent, respectively during April-
21

September 2009. Region-wise, over half of India’s exports (55 per cent) in the first
half of 2009-10 were to Asia (including ASEAN), up from around 40 per cent in
2001-02. During 2009-10 (April-September), exports to Asia (including ASEAN)
declined by 27.6 per cent, and to Europe by 30.9 per cent. India’s merchandise
exports of South Asian countries declined by 30.4 per cent. State-wise contribution
of exports in India (Table 1.9) reveals that Maharashtra and Gujarat, followed by
Tamil Nadu, Karnataka, and Andhra Pradesh top the list. Maharashtra and Gujarat
are far ahead of other states.
Since the opening up of the Indian economy, imports are increasingly
sourced from a wider range of countries. Traditional key trading partners like
Germany, Japan, UK and US have subsided in terms of their market share and new
import partners from East Asia (especially China) have emerged. Another
important development has been a gradual dissipation of the East European
countries as a major source of India’s imports. The high share of OPEC countries
in the recent period reflects the magnitude of crude oil imports due to the rising
oil-intensity of the Indian economy and high oil prices. Finally, imports from
China have increased significantly during recent years from almost minuscule
level in the early 1990s.
In 2009-10 (April-September), Asia and ASEAN continued to be the major
source of India’s imports accounting for 61.3 per cent of the total. Country-wise,
China remained the largest source with a share of 12 per cent in India’s total
imports followed by the USA (5.95%), UAE (5.93%) and Saudi Arabia (5.5%).
As a result of global recession, India’s import growth from 14 of the top 15 trading
partners was negative, Indonesia being the exception.
Figures 1.5 to 1.8 present the direction of India’s exports and imports
during 1998-99 and to 2008-09. Fig.1.5 and Fig.1.6 cover the share of top 10
countries of India’s imports and exports, respectively. Fig.1.7 deals with export
growth of select countries during 2000-06 and 2008. Fig.1.8 indicates the share of
select countries in India’s total merchandise trade (imports and exports) during
2004-05 and 2008-09.
22

Figure 1.5: Share of Top 10 Countries of India's Merchandise Imports


(%) (1998-99 and 2008-09) (Source: Table 1.5(c))

Country 1998-99 2008-09


China 2.59 10.79
UAE 4.06 7.1
Saudi Arabia 4.32 6.71
USA 8.59 6.25
Iran 1.12 4.18
Germany 5.05 4.02
Switzerland 6.94 3.94
Kuwait 3.54 3.23
Nigeria 2.78 2.99
Korea Republic (South) 3.29 2.96

Korea Republic 2.96


(South) 3.29

2.99
Nigeria
2.78

3.23
Kuw ait
3.54

3.94
Sw itzerland
6.94

4.02
Germany
Country

5.05
2008-09
1998-99
4.18
Iran
1.12

6.25
USA
8.59

6.71
Saudi Arabia
4.32

7.1
UAE
4.06

10.79
China
2.59

0 5 10 15
% Share
23

Fig. 1.6: Share of Top 10 Countries of India's Merchandise Exports


(%) (1998-99 and 2008-09) (Source: Table 1.6(c))
Country 1998-99 2008-09
UAE 5.62 13.09
USA 21.67 11.39
China 1.29 5.07
Singapore 1.56 4.49
Hong Kong 5.66 3.64
UK 5.59 3.61
Germany 5.58 3.47
Netherlands 2.3 3.43
Saudi Arabia 2.33 2.73
Belgium 3.88 2.41

Share of Top 10 Countries of India's Merchandise Exports

2.41
Belgium 3.88

2.73
Saudi Arabia 2.33

3.43
Netherlands 2.3

3.47
Germany
5.58

3.61
UK
C o u n t ry

5.59 2008-09

3.64 1998-99
Hong Kong 5.66

4.49
Singapore 1.56

5.07
China 1.29

11.39
USA
21.67

13.09
UAE 5.62

0 5 10 15 20 25
% Share
24

Fig. 1.7: Export Growth of Select Countries


(2000-06 and 2008) (Source: Table 1.7) (%)

CAGR Annual
Country
2000-06 2008
China 25.4 17.3
Hong Kong 7.8 5.3
Malaysia 8.5 19.1
Indonesia 7.9 24.4
Thailand 11.3 12.9
Singapore 12 13
India 19.1 20.4
Brazil 16.5 23.2
Mexico 7.1 7.3
Russia 19.3 33.1
Korea 11.2 13.6
World 11.2 16.2

2000-06
Export Growth of Select Countries
2008

35 33.1

30

25.4
24.4
25 23.2

20.4
19.1 19.1 19.3
20
17.3
16.5 16.2
%
15 13 13.6
12.9
12
11.3 11.2 11.2

10 8.5
7.8 7.9
7.17.3
5.3
5

0
China Malaysia Thailand India Mexico Korea
Country
25

Fig. 1.8: Share of Select Countries in India's Total Merchandise Trade


(Imports and Exports) (%)(Source: Table 1.8)

Partner Country 2004-05 2008-09

UAE 6.1 9.8


China 6.5 8.6
USA 10.6 8.2
Saudi Arabia 1.4 5.1
Germany 3.5 3.8
Singapore 3.4 3.3
Iran 0.8 3
Hong Kong 2.8 2.7
Korea RP 2.3 2.6
UK 3.7 2.6
Australia 2.3 2.6
Switzerland 3.3 2.5
Japan 2.7 2.2
Malaysia 1.7 2.2
Nigeria 0.4 2.1

Share of Select Countries in India's Total Merchandise Trade (%)


2004-05
2008-09
12

10.6
9.8
10

8.6
8.2
8

6.5
6.1
%

6
5.1

3.8 3.7
4 3.5 3.43.3 3.3
3 2.82.7 2.6
2.3
2.6 2.6
2.3 2.5 2.7
2.2 2.2 2.1
2 1.7
1.4
0.8
0.4

0
UAE USA Germany Iran Korea RP Australia Japan Nigeria

Country
26

III. Foreign Trade Policies


1.6 Foreign Trade Policy 2004-09
1.6.1 Objectives and Strategy
The new Foreign Trade Policy (FTP) 2004-09 takes an integrated view of
the overall development of India’s foreign trade, and essentially provides a
roadmap for the development of this sector. It is built around two major objectives
of doubling India’s share of global merchandise trade by 2009, and using trade
policy as an effective instrument of economic growth with a thrust on employment
generation. Key strategies to achieve these objectives, inter alia, include:
unshackling of controls and creating an atmosphere of trust and transparency;
simplifying procedures and bringing down transaction costs; neutralising incidence
of all levies on inputs used in export products; facilitating development of India as
a global hub for manufacturing, trading and services; identifying and nurturing
special focus areas to generate additional employment opportunities, particularly in
semi-urban and rural areas; facilitating technological and infrastructural
upgradation of the Indian economy, especially through import of capital goods and
equipment; avoiding inverted duty structure and ensuring that domestic sectors are
not disadvantaged in trade agreements; upgrading the infrastructure network
related to the entire foreign trade chain to international standards; revitalising the
Board of Trade by redefining its role and inducting into it experts on trade policy;
and activating Indian Embassies as key players in the export strategy.
1.6.2 Special Focus Initiatives
The FTP 2004 has identified certain thrust sectors having prospects for
export expansion and potential for employment generation. These thrust sectors
include agriculture, handlooms and handicrafts, gems & Jewellery, and leather and
footwear sectors. Sector specific policy initiatives for the thrust sectors include, for
agriculture sector, introduction of a new scheme called Vishesh Krishi Upaj
Yojana (Special Agricultural Produce Scheme) to boost exports of fruits,
vegetables, flowers, minor forest produce and their value added products. Under
the scheme, exports of these products qualify for duty free credit entitlement (5 per
cent of f.o.b value of exports) for importing inputs and other goods. Other
27

components for agriculture sector include duty free import of capital goods under
Export Promotion Capital Goods (EPCG) scheme, permitting the installation of
capital goods imported under EPCG for agriculture anywhere in the Agri-Export
Zone (AEZ), utilising funds from the Assistance to States for Infrastructure
Development of Exports (ASIDE) scheme for development of AEZs, liberalisation
of import of seeds, bulbs, tubers and planting material, and liberalisation of the
export of plant portions, derivatives and extracts to promote exports of medicinal
plants and herbal products. The special focus initiative for handlooms and
handicraft sectors includes extension of facilities like enhancing (to 5 per cent of
f.o.b. value of exports) duty free import of trimmings and embellishments for
handlooms and handicrafts, exemption of samples from countervailing duty
(CVD), authorising Handicrafts Export Promotion Council to import trimmings,
embellishments and samples for small manufacturers, and establishment of a new
Handicrafts Special Economic Zone. Major policy announcements under gems and
jewellery sector encompass: permission for duty free import of consumables for
metals other than gold and platinum up to 2 per cent of f.o.b value of exports; duty
free re-import entitlement for rejected jewellery allowed up to 2 per cent of f.o.b.
value of exports; increase in duty free import of commercial samples of jewellery
to Rs.1 lakh, and permission to import of gold of 18 carat and above under the
replenishment scheme. Specific policy initiatives in leather and footwear sector are
mainly in the form of reduction in the incidence of customs duties on the inputs
and plants and machinery. The major policy announcements for this sector include:
increase in the limit for duty free entitlements of import trimmings,
embellishments and footwear components for leather industry to 3 per cent of
f.o.b. value of exports and that for duty free import of specified items for leather
sector to 5 per cent of f.o.b. value of exports; import of machinery and equipment
for Effluent Treatment Plants for leather industry exempted from customs duty;
and re-export of unsuitable imported materials (such as raw hides and skin and wet
blue leathers) has been permitted. The threshold limit of designated ‘Towns of
Export Excellence’ has also been reduced from Rs.1,000 crore to Rs.250 crore in
the above thrust sectors.
28

1.6.3 New Export Promotion Schemes


A new scheme to accelerate growth of exports called ‘Target Plus’ has
been introduced. Under the scheme exporters achieving a quantum growth in
exports are entitled to duty free credit based on incremental exports substantially
higher than the general actual export target fixed. Rewards are granted based on a
tiered approach. For incremental growth of over 20 per cent, 25 per cent and 100
per cent, the duty free credits are 5 per cent, 10 per cent and 15 per cent of f.o.b
value of incremental exports. Another new scheme called Vishesh Krishi Upaj
Yojana has been introduced to boost exports of fruits, vegetables, flowers, minor
forest produce, and their value added products. Export of these products qualify
for duty free credit entitlement equivalent to 5 per cent of f.o.b value of exports.
The entitlement is freely transferable, and can be used for import of a variety of
inputs and goods. To accelerate growth in export of services so as to create a
powerful and unique ‘Served from India’ brand instantly recognised and respected
the world over, the earlier duty free export credit (DFEC) scheme for services has
been revamped and re-cast into the ‘Served from India’ scheme. Individual
service providers who earn foreign exchange of at least Rs.5 lakh, and other
service providers who earn foreign exchange of at least Rs.10 lakh are eligible for
a duty-credit entitlement of 10 per cent of total foreign exchange earned by them.
In the case of stand-alone restaurants, the entitlement is 20 per cent, whereas in the
case of hotels, it is 5 per cent. Hotels and restaurants can use their duty credit
entitlement for import of food items and alcoholic beverages. To make India into a
global trading-hub, a new scheme to establish Free Trade and Warehousing
Zone (FTWZs) has been introduced to create trade-related infrastructure to
facilitate the import and export of goods and services with freedom to carry out
trade transactions in convertible currencies. Besides permitting FDI up to 100 per
cent in the development and establishment of these Zones, each zone would have
minimum outlay of Rs.100 crore and five lakh square meters built up area. Units in
the FTWZs qualify for all other benefits as applicable for units in Special
Economic Zones (SEZs).
29

1.7 Foreign Trade Policy (FTP) 2009-14


1.7.1 Basic Approach, Objectives and Strategy
For India to become a major player in world trade, an all encompassing and
comprehensive vision is required for the overall development of the country’s
foreign trade. Trade is not an end in itself, but a means to economic growth and
national development. Coherence and consistency among trade and other
economic policies is important for maximising the contribution of such policies to
development. Thus, while incorporating the existing practice of enunciating a
stable Five Year Policy, it is necessary to go much beyond and take an integrated
approach to the developmental requirements of India’s foreign trade.
In 2008-09, the world faced an unprecedented economic slow-down and
witnessed one of the most severe global recessions in the post-war period that
affected countries across the globe in varying degrees. All major economic
activities like industrial production, trade capital flows, unemployment, investment
and consumption took a hit.
India has not been affected to the same extent as other economies of the
world during this phase. Yet our exports have suffered a decline since October
2008 significantly due to shrinkage of demand in the traditional markets of our
exports due to global economic slowdown, and the reduced international prices of
commodities. India’s exports in dollar terms showed a growth of about 48.1%
from April to September, 2008 whereas from October, 2008, it started declining,
bringing down the annual growth to 13.6% in 2008-09. After showing a negative
growth for six consecutive months in 2009-10, in continuation of six months of the
previous year, India’s exports have entered the positive territory (growing at 4.8%
during the month of October 2009). Agriculture and industry have shown
remarkable resilience and dynamism in contributing to a healthy growth in exports.
Similarly, imports have shown declining trend from December 2008 up to October
2009 (eleven consecutive months), and recorded positive growth of 5.5 per cent in
November 2009, and improved thereafter. Month-wise variation of exports and
imports from 2007-08 to 2009-10 are given in Table 1.1(C) and Figures 1.1 and
30

1.2 at the end of the chapter. It is in this context and background that the current
Foreign Trade Policy (FTP, 2009-14) was announced on 27th August 2009.
The short term objective of FTP (2009-14) is to arrest and reverse the
declining trend of exports, and to provide additional support especially to those
sectors which have been hit badly by recession in the developed world. The long
term policy objective for the Government is to double India’s share in global trade
by 2020.
---------------------------------------------------------------------------------------------------
Objectives of FTP 2009-14
• An annual export growth of 15% with an annual export target of US $200
billion by March 2011;

• To come back on the high export growth path of around 25% per annum in the
remaining three years of this Foreign Trade Policy, i.e., up to 2014;

• To double India’s exports of goods and services by 2014;

• The long term policy objective for the Government is to double India’s share in
global trade by 2020.

---------------------------------------------------------------------------------------------------
In order to meet the objectives stated above, the major thrust areas of
strategy spelt out in FTP (2009-14) comprise a mix of policy measures including
fiscal incentives, institutional changes, procedural rationalisation, enhanced market
access across the world, and diversification of export markets. The FTP envisages
three basic pillars for supporting India’s exports. These are (i) infrastructure
related to exports, (ii) bringing down transaction costs, and (iii) providing full
refund of all indirect taxes and levies. The prime importance here is on a stable
policy environment conducive to foreign trade by way of continuation of exporter
friendly and transparent schemes/ facilities. In addition, after the operationalisation
of the Goods and Services Tax (GST) regime, the Government will make
concerted attempts to see that the GST rebates are given on all indirect taxes and
levies on exports. A special thrust would be provided to employment intensive
sectors which have witnessed job losses in the wake of this recession, especially in
the fields of textile, leather, handicrafts, etc.
31

Given the current economic climate, policy measures initiated in the FTP
2009-14 would basically be in force for a two year period after which mid-course
corrections could be undertaken, if required. In the meantime, sectoral reviews to
assess the impact of these measures on Indian exports would be carried out, and
accordingly appropriate initiatives would be taken.
One area of concern the FTP 2009 has not highlighted is the fall in imports
in tandem with exports, with declining negative growth continuing from December
2008 UP TO October 2009. Lower non-oil imports indicate a slowdown in
domestic investment. Lower imports have narrowed the merchandise trade deficit
in the balance of payments, an outcome that would be favourable had it been
achieved through robust export performance. The FTP could have presented a
strategic vision for a global India in the newly emerging economic order. It is,
however, long on short term expedients, and short on long term strategic vision.
The immediate objective is to reverse the decline in exports, and provide succour
to exporters. One other worry relates to growing protectionism abroad, especially
in developed countries.
1.7.2 Major Initiatives Taken in the FTP 2009-14
Higher Support for Market and Product Diversification
1. 27 new markets have been added under Focus Market Scheme. These include
16 new markets in Latin America and 11 in Asia-Oceania.
2. A large number of products from various sectors including Engineering
products, value added Plastic products, Jute and Sisal products, Technical
Textiles, Green Technology products, Project goods, vegetable textiles,
Electronic items etc. have been included for benefits under Focus Product
Scheme (FPS).
3. The incentive available under Focus Market Scheme (FMS) has been raised
from 2.5% to 3%.
4. The incentive available under Focus Product Scheme (FPS) has been raised
from 1.25% to 2%.
5. Market Linked Focus Product Scheme (MLFPS) has been greatly expanded by
inclusion of products classified under more than 3600 ITC(HS) Codes at 8 digit
level. Benefits to these products will be provided, if exports are made to 15
identified markets (Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania,
Brazil, Mexico, Ukraine, Vietnam, Cambodia, Australia, New Zealand, Japan,
and China). A common simplified application form has been introduced for
taking benefits under Focus Product Scheme (FPS), Focus Market Scheme
32

(FMS), Market Linked Focus Products Scheme (MLFPS) and Vishesh Krishi
and Gram Udyog Yojna (VKGUY).
Technological Upgradation
• EPCG Scheme at Zero Duty has been introduced for certain sectors like
engineering & electronic products, basic chemicals & pharmaceuticals,
apparels & textiles, plastics, handicrafts, chemicals & allied products and
leather & leather products (subject to exclusions as provided in HBP Vol. 1).
The scheme shall be in operation till 31.3.2011.
• Jaipur, Srinagar and Anantnag recognised as ‘Towns of Export Excellence’ for
handicrafts; Kanpur, Dewas and Ambur recognised for leather products; and
Malihabad for horticultural products.
Support for Green Products and Products from North East
• Focus Product Scheme benefit extended for export of ‘green products’; and for
exports of some products originating from the North East.
Status Holders
• To accelerate exports and encourage technological upgradation, additional
Duty Credit Scrips shall be given to Status Holders @ 1% of the FOB value of
past exports for certain specified sectors. This facility shall be available for
export up to 31.3.2011.
• Transferability for the Duty Credit Scrips being issued to Status Holders under
paragraph 3.8.6 of FTP under VKGUY Scheme permitted among status
holders.
Stability / Continuity of Foreign Trade Policy
• Duty Entitlement Passbook (DEPB) Scheme extended beyond 31-12-2009 till
31.12.2010. DEPB rate shall also include factoring of custom duty component
on fuel where fuel is allowed as a consumable in Standard Input-Output
Norms.
• Interest subvention of 2% for pre-shipment credit for 7 specified sectors has
been extended till 31.3.2010.
• Income Tax exemption to 100% EOUs and to STPI units has been extended for
the financial year 2010-11.
Other Measures
• The adjustment assistance scheme initiated in December 2008 to provide
enhanced ECGC cover at 95% to the adversely affected sectors is continued till
March, 2010.
• Export obligation on import of spares, moulds etc. under EPCG Scheme has
been reduced to 50% of the normal specific export obligation.
33

• Re-fixation of Annual Average Export Obligation for a particular financial year


in which there is decline in exports from the country, extended for the 5 year
Policy Period, 2009-14.
Scheme-wise Details
Details in respect of a few of the major scheme-wise initiatives announced
under the Foreign Trade Policy, 2009-14 are given here.
A. Duty Neutralisation / Remission Schemes
(i) Duty Entitlement Passbook (DEPB) Scheme
In its constant endeavour to provide a stable Foreign Trade Policy and to
remove uncertainty about the future of the most popular exporter friendly scheme
i.e., the DEPB scheme, Government extended the validity of the scheme till 31st
December 2010. One of the major initiatives taken to keep its promise to neutralize
duties on all the inputs used in the manufacture of the export product and to meet
the basic of DEPB scheme to neutralize incidence of customs duty on import
content of export product, the Custom duty component, of the ‘consumable’ fuel,
has been allowed in the DEPB rate. Further since DEPB scheme allows duty
credit, which for all practical purposes is equivalent to cash, utility of DEPB
scheme for payment of customs duty, in case of default in fulfillment of export
obligation under various schemes, has been allowed. DEPB rates for certain items
have been notified and to allow the exporters to avail the DEPB benefit on the
prevailing international prices, value cap for certain products have been revised
upwards.
(ii) Advance Authorization Scheme
To promote value added product, minimum value addition under the
scheme has been raised to 15% in lieu of earlier positive value addition.
Exemption from payment of excise duty in lieu of refund in case of downstream
product manufacturer, supply against invalidation letter by the Intermediate
manufacturer up to 2 stages have been allowed, provided the finished product is
physically exported by the ultimate exporters. To reduce the transaction time and
cost, henceforth, advance authorization holder shall be able to take the imported
components direct to the site of project site instead of taking the same through the
manufacturing premises of the exporter. Further for the first time, a specific
34

facility has been spelt out in the FTP allowing disposal of the manufacturing waste
prior to fulfillment of export obligation.
B. Vishesh Krishi and Gram Udyog Yojna (Special Agriculture and
Village Industry Scheme)
Keeping in view the objective of Foreign Trade Policy 2009-14 to promote
employment generation in rural and semi urban areas, Vishesh Krishi And Gram
Udyog Yojana has been expanded to include export of Agricultural Produce and
their value added products; Minor Forest Produce and their value added variants;
Gram Udyog Products; and Other products, as notified from time to time.
Duty Credit Scrip benefits are granted with an aim to compensate high
transport costs, and to offset other disadvantages. Exporters, of products notified in
Appendix 37A of HBP vol.1, shall be entitled for Duty Credit Scrip equivalent to
5% of FOB value of exports (in free foreign exchange) for exports made from
7.8.2009 onwards.
Higher Incentive for Status holders is available in the form of duty credit
scrip equal to 10% of FOB value of agricultural exports, limited to Rs. 100 crore
per annum, for products covered under ITC HS Chapters 1 to 24, to permit import
of Capital Goods/equipments like Cold Storage Units; Pre-cooling Units and
Reefer Van/Containers, etc.
C. Focus Market Scheme (FMS)
For offsetting high freight cost and other externalities to select international
markets with a view to enhance India’s export competitiveness in these countries,
“Focus Market Scheme” has been launched w.e.f. 1.4.2006. Exporters of all
products to notified countries (as in Appendix 37C of HBP vol.1) shall be entitled
for Duty Credit Scrip equivalent to 3% of FOB value of exports. So far, the
Scheme covers a total of 110 markets (52 markets in Africa, 31 in Latin America,
10 in CIS-CAR Block, 5 in East Europe, 1 in Asia, and 11 in Asia-Oceania Block).
D. Focus Product Scheme (FPS)
To accelerate export promotional efforts of such products which have high
export intensity / employment potential, so as to offset infrastructure inefficiencies
35

and other associated costs involved in marketing of these products, a Scheme


called Focus Product Scheme, has been introduced w.e.f. 1.4.2006.
Under the Scheme, exports of notified products (as in Appendix 37D of
HBP vol.1) to all countries (including SEZ units) would be entitled for Duty Credit
scrip equivalent to 2% of FOB value of exports (in free foreign exchange) for
exports made from 27.8.2009 onwards. However, Special Focus Product (s) /
sector (s), covered under Table 2 and Table 5 of Appendix 37D [toys and sports
goods, carpets and handicrafts, at present], shall be granted Duty Credit Scrip
equivalent to 5% of FOB value of exports. Over 1150 products have so far been
covered at 8 digit level under the Scheme, which include leather products and
footwear, handloom products, handmade carpets, and other textile floor coverings,
handicrafts, coir and jute products, technical textiles, engineering products, Green
technology products, electronic products, value added plastic and Glass products
etc.
E. Market Linked Focus Products Scheme (MLFPS)
To give significant boost to market penetration of specific product in
specified markets, a variant under Focus Product Scheme called Market Linked
Focus Products was introduced from 1.4.2008. Under the Scheme, export of
products /sectors of high export intensity / employment potential (which are not
covered under the FPS List) would be incentivised at 2% of f.o.b value of exports
(in free foreign exchange) under FPS when exported to the Linked Markets
countries), which are not covered in the present FMS List, as notified in Appendix
37D of HBPv1, for exports made from 27.8.2009 onwards.
Presently, the products covered under the scheme include Motor vehicles,
autocomponents, apparels, knitted and crocheted fabrics, pharma products, value
added plastic and rubber goods, Glass products, dyes and chemicals, household
articles of Aluminium, Machine Tools, Earth moving equipments, Transmission
Towers, Electrical & Power equipments, steel tubes/pipes/galvanized sheets,
compressors, Iron & Steel structures, three wheelers etc. The countries covered
under the Scheme include Algeria, Egypt, Kenya, Nigeria, South Africa, Tanzania,
36

Brazil, Mexico, Ukraine, Australia, New Zealand, Cambodia, Vietnam, Japan and
China. There are over 3600 products so far covered at 8 digit levels.
F. Served from India Scheme
The objective of the Scheme is to accelerate growth in export of services so
as to create a powerful and unique ‘Served from India’ brand, instantly recognised
and respected the world over. All Indian Service Providers, of services listed in
Appendix 10 of HBP vol.1, who have free foreign exchange earning of at least
Rs.10 lakh in preceding financial year / current financial year shall qualify for
Duty Credit.
G. Status Holders Incentive Scheme (SHIS)
With an objective to promote investment in upgradation of technology of
some specified sectors such as Leather, Textiles, Jute, Handicrafts, Engineering,
Plastics, Basic Chemicals, Status Holders shall be entitled to incentive scrip @ 1%
of FOB value of exports made during 2009-10 and 2010-2011, of these specified
sectors, in the form of duty credit [subject to prescribed exclusions as specified]
for procurement of capital goods for technology upgradation, with actual user
condition. This shall be over and above any duty credit scrip claimed/availed under
Chapter-3 of FTP. This facility is available for exports made up to 31.3.2011.
H. Export Promotion Capital Goods (EPCG) Scheme
In order to facilitate augmentation of imports under the Scheme, at present,
there are two EPCG Schemes, that is, 3% concessional duty scheme and Zero duty
concessional EPCG Scheme.
(a) 3% Concessional Duty Scheme
The salient features of 3% concessional duty scheme are as under:
(i) The Scheme was initially introduced in the Import and Export Policy 1990-
93 for import of Capital Goods at a concessional rate of Customs Duty @
25%. The concessional rate of duty has been reduced gradually to 3% since
1.4.2008.
(ii) The scheme allows import of capital goods for pre-production, production
and post production as well as for computer software systems subject to an
export obligation equivalent to 8 times of duty saved amount (50% of
Export Obligation-EO - in case of import of spares),to be fulfilled in 8 years
reckoned from Authorization issue date.
37

(iii) The scheme also requires maintenance of average level of exports achieved
by the exporter in the preceding three licensing years for the same and
similar products within the overall export obligation period including
extended period, except for categories mentioned in para 5.7.6 of Hand
Book of Procedure.
(iv) To encourage exports from the tiny and cottage sector, an export obligation
period of 12 years is granted for fulfillment of export obligation.
(v) EPCG authorization can also be issued for import of spares, tools and
refractory for initial lining and catalyst for initial charge for existing plant
and machinery. (imported earlier under the EPCG Scheme or otherwise).
(vi) In case of agro units, the export obligation is equivalent to 6 times duty
saved on imported capital goods to be completed within a period of 12
years.
(vii) In case of SSI Units, the EO is equivalent to 6 times duty saved to be
fulfilled over a period of 8 years provided the value of such imported
capital goods does not exceed Rs.50 lakh and total investment in plant and
machinery after such imports does not exceed the SSI limits.
(viii) For EPCG authorizations with a duty saved amount of Rs.100 crore or
more, the export obligation period is 12 years.
(ix) Import of second hand capital goods is allowed without any age restriction.

(b) Zero Duty EPCG Scheme


The scheme has been introduced in the new Foreign Trade Policy 2009-14
for specified sectors, viz, for exporters of engineering & electronic products, basic
chemicals & pharmaceuticals, apparels & textiles, plastics, handicrafts, chemicals
& allied products and leather & leather products; subject to exclusions as provided
in HBP vol. I. The salient features of the scheme are as under:
• Under zero duty EPCG Scheme, EO equivalent to 6 times of duty saved
amount on capital goods is required to be fulfilled in 6 years from authorization
issue date.
• The validity period for import of capital Notification and concessional duty
under the EPCG Scheme.
• EO period of 6 years can be extended for a maximum period of 2 years only.
All other provisions pertaining to 3% duty EPCG scheme, to the extent they
are not inconsistent with the above provisions of zero duty EPCG Scheme, are
applicable to the zero duty EPCG Scheme also. The zero duty EPCG Scheme will
be in operation till 31.3.2011.
38

1.7.3 Observations on FTP 2009-14


Confederation of Indian Textile Industry felt that even while inclusion of 17
technical textile products in the focus product scheme was a welcome step,
limiting benefits such as one per cent additional duty scrips for status holders and
zero duty for imports under the EPCG scheme to units that had not taken benefit
under the Technology Upgradation Fund Scheme was disappointing, as most
textile units were covered under the scheme, and they would be denied the
benefits. The specific provisions of various schemes announced in the FTP should
be examined in the light of the feedback presented by the concerned all India
bodies of exporting units, to enable the exporters to become competitive in the
global market in the present global slowdown climate. Exporters have been urged
to improve their competitiveness, besides pushing up sales in domestic markets.

Through the FTP and in earlier stimulus packages, India announced a


number of measures to counter the global slowdown through interest subvention,
reduction in excise duties (to stimulate demand), and reduction in service tax.
However, it is observed that countries in the neighbourhood have announced such
measures on a much larger scale as compared to India’s. The Government
announced a new package of incentives to exporters on 12 January 2010. This
seeks to aggressively pursue export of products under Market Linked Focussed
Programme (MLFP) Scheme to China and Japan, along with an incentive package
of about Rs.500 crore for exporters, especially those in the labour intensive
sectors. This would expand the horizon for exporters hit by dwindling orders from
recessionary markets. The sectoral package includes expansion of Focussed
Product Scheme (FPS) and Special FPS under which exporters are given 2-3 per
cent incentives by including 2,000 new products.

The measures announced so far should be supplemented by a few more


steps as listed here, based on the viewpoints presented by specific industry
associations and Federation of Indian Export Organisations (FIEO). The
government can not generate demand for exports but it can certainly help exporters
39

to be more competitive so that they seize orders which they are losing by thin
margins. It can also impress upon banks to be more proactive for exports.

1. An Export Development Fund should be created with a corpus equivalent to


0.5 per cent of the preceding year’s exports. The facility available under focus
market scheme may be increased to 5 per cent.
2. The post–shipment credit now available up to 180 days should be extended to
365 days, keeping in view the financial crunch faced by overseas buyers at
present.
3. The government should provide a moratorium on term loans to exporters for
two years in view of the present difficult position.
4. The pre-shipment and post-shipment credits in foreign currencies are virtually
not available particularly to micro, small and medium enterprises (MSMEs).
The RBI should facilitate the process. The government may stand guarantee
for exporters receiving orders from abroad so as to encourage banks to provide
credit to such genuine exporters.
5. Insurance companies should adopt a flexible stand on single buyer policy, and
adopt case by case approach rather than taking a rigid stand.
In the light of the fact that the growth of exports on a monthly basis is
steadily improving, by shifting from negative growth rate to a positive growth rate
in the near future, it is urged that the stimulus package in operation from the
Government of India and the Reserve Bank should be continued for some more
time. Exit from these measures should be gradual in line with global economic
recovery, particularly in developed countries. It should be a cautious and calibrated
withdrawal.

1.8 First Annual Supplement of 2010 to the Foreign Trade Policy 2009-14

The first Annual Supplement 2010-11 to the Foreign Trade Policy (2009-
14) was announced in August 2010, in the background of the Indian industry and
trade having moved out of recession, and made a beginning on the road to
recovery from the third quarter of 2009-10 (October 2009 onwards). The Centre
announced incentives worth Rs.1052 crore mainly to the labour-intensive export
oriented industries including textiles, handlooms, handicrafts, leather, bicycles, tea,
silk carpets, marine, toys and sports goods to help them cruise through the fragile
global economic recovery phase. These industries are still not yet out of the
woods. The focus of the changes made in the incentives is on continuity of existing
40

schemes, support to labour-intensive sectors, and reduction in transaction cost and


time by simplifying procedures and streamlining decision making. The
Government expressed confidence of achieving the US $200 billion export target
for 2010-11. During 2009-10, exports touched US $178.7 billion, decline by 3.6
per cent over the previous year. Imports for 2009-10 recorded US $286.8 billion,
decline by 5.6 per cent over the previous year. Total foreign trade was US $465.5
billion in 2009-10. After declining for 12 months in a row since October 2008,
exports has shown positive growth from October 2009. Imports, after declining
for 11 months in a row since December 2008, has shown positive growth from
November 2009. Though India can claim with humility that the immediate
objectives of the Foreign Trade policy were realised, it should be noted that the
global recovery so far has been fragile, and the economies around the world are
still emerging out of the shadows of grim recessionary period. Given the uneven
recovery in the world economy, India’s export performance needs to be closely
monitored. It is a happy augury that the declining trend in exports and imports has
been arrested before the close of 2009, facilitating faster growth of foreign trade.
Export incentives announced in the first annual supplement are listed here.
Many of them are in the nature of continuity of existing facilities announced in the
context of global meltdown.
• Zero duty Export Promotion Capital Goods (EPCG) scheme extended by one
year up to March 31, 2012, and more products added. The scheme was
announced in August 2009, and was valid for two years, up to March 2011.
• Duty Entitlement Passbook (DEPB) scheme under which taxes are reimbursed
to exporters extended by six months, till June 30, 2011, for the last time,
recognising the fragile recovery, and the prevailing uncertainties in global
markets. This is designed to neutralise import duty on inputs.
• Number of additional products from sectors like leather, engineering, textiles
and jute added to two per cent interest subvention scheme for pre-shipment
credit for export sectors. Handlooms, handicrafts, carpets, and small and
medium enterprises (SMEs) have been getting this facility, which will now be
available till March 31, 2011.
• Additional benefit of 2 per cent bonus for 135 products covered under Focus
Product Scheme (FPS), over and above the existing benefit of 5 per cent (3 per
cent for Focus Market Scheme and 2 per cent for Focus Product Scheme of
f.o.b.- free on board - value).
41

• One per cent Status Holder Incentive scheme (SHIS) for technology
upgradation extended till 2011-12, and more products added. Special flexibility
for transferability of duty credit scrips issued to Status Holders (recognised
exporters) has been provided under VKGUY (Vishesh Krishi and Gram Udyog
Yojana) for import of cold chain equipment to units in the Food Parks.
• Benefits under two per cent duty benefit to garment exporters under the market
linked Focus Product Scheme to 27 countries of the European Union (EU)
extended from October 2010 to March 2011.
• To the existing 21 Towns of Export Excellence, three more centres would be
added - for handicrafts in Barmer (Rajasthan), for textiles at Bhiwandi
(Maharashtra), and for leather products at Agra (Uttar Pradesh).
• Steps announced to reduce transaction cost of exports which is at present
estimated at 7-8 per cent of the exports value.
• Leather sector allowed to re-export unsold imported raw hides and skins and
semi-finished leather from public bonded warehouses, without export duty.
• List of items allowed for duty free import of gems and jewellery sector
expanded.
• Scrips issued under Served from India Scheme (for service sector) can be used
for payment of duty on import of vehicles in the nature of professional
equipment.
• Instant tea and CSNL Cardinol (Cashew nut liquid) included for 5 per cent duty
benefit under VKGUY (Vishesh Krishi and Gram Udyog Yojana).
• Exporters availing themselves of advance authorisation for annual requirement
of imports would also be exempt from payment of anti-dumping and safeguard
duty.
The Apparel Export Promotion Council (AEPC) has welcomed extra
incentives given for the labour-intensive sectors. Describing the new package as
‘enriching’ the policy, the AEPC stated that the package could, however, be made
better if the additional benefit of two per cent bonus as a higher support for market
and product diversification was extended to the readymade garments segment too,
besides silk carpets, toys and sports goods, leather products, and engineering
items. The Council also wanted the Market Focus Product Scheme to be extended
to the US market too, and suggested that the one per cent scrip be made available
to status holder exporters.
42

Annexure 1.1
Stimulus Package for Exports to Counter Effects of Global Economic
Slowdown (announced in Union Budgets of 2008-09 and 2009-10)

(i) Measures taken by the Government:


 Interest subvention of 2% provided till 30.09.2009, extended up to
31.3.2010, to the following labour intensive sectors for exports:- Textiles
(including Handlooms), Handicrafts, Carpets, Leather, Gems & Jewellery,
Marine Products and SMEs;
 Additional funds of Rs 350 crore provided (in December 2008) for
Handicraft items etc. in Vishesh Krishi and Gram Udyog Yojana
(VKGUY);
 Market Linked Focus Product Scheme extended for bicycle parts, Motor
Cars and Motor Cycles, Apparels and Clothing accessories, Auto
Components etc. for exports from 1.4.09 to 30.09.09;
 Higher Support for Market and Product Diversification extended in FTP,
2009-14:
 The incentive available under Focus Market Scheme (FMS) raised
from 2.5% to 3%;
 The incentive available under Focus Product Scheme (FPS) raised
from 1.25% to 2%;
 26 new markets added under Focus Market Scheme. These include
16 new markets in Latin America and 10 in Asia-Oceania;
 A large number of products (527 new products at 8 digit level and 82
new Handicraft products) from various sectors included for benefits
under FPS;
 Market Linked Focus Product Scheme (MLFPS) greatly expanded
by inclusion of products classified under as many as 1500 products at
8 digit level for export to 13 new countries (Algeria, Egypt, Kenya,
Nigeria, South Africa, Tanzania, Brazil, Mexico, Ukraine, Vietnam,
Cambodia, Australia and New Zealand);
 MLFPS benefits also extended for export to additional new markets
for certain existing products, like auto components, motor cars,
bicycle and its parts and apparels, among others;
 Focus Product Scheme benefit extended for export of ‘green
technology products’; and for exports of some products originating
from the North East;
 Project Exports and a large number of manufactured goods covered
under FPS and MLFPS;
43

 Adequate funds provided to ensure full refund of pending claims of CST /


Terminal Excise duty /Duty drawback on deemed exports;
 Exporter friendly and the popular Duty Neutralization Scheme, i.e. Duty
Entitlement Passbook (DEPB) Scheme extended up to 31st December, 2010;
 DEPB rates for all items where they were reduced in November, 2008,
restored to higher rates with retrospective effect and the ad hoc increase in
DEPB rates from 1% to 3% since 2007, continued;
 Duty Drawback rates on certain items restored to higher rates effective from
1st September, 2008; Duty drawback rates retained at the same level in
spite of reduction in Excise tariff across the board and customs tariff for few
items; Duty drawback rates announced for the first time for precious metal
jewellery items;
 DEPB and Freely Transferable Incentive Schemes provisionally allowed
without awaiting receipt of Bank Realization Certificate (BRC);
 Export Obligation Period under Advance authorization Scheme enhanced
from 24 months to 36 months without payment of composition fee;
 To aid technological upgradation of our export sector, EPCG Scheme at
Zero Duty has been introduced for certain sectors. The scheme shall be in
operation till 31.3.2011;
 To accelerate exports and encourage technological upgradation, additional
Duty Credit Scrips shall be given to Status Holders @ 1% of the FOB value
of past exports of certain sectors for procurement of capital goods. This
facility shall be available up to 31.3.2011.
 Facility of non-recovery of incentives granted to exporters, subject to RBI
specifically writing off the export proceed realization along with a
certificate from Indian Missions abroad;
 A number of measures taken to reduce transaction cost for the exporters
such as abolition of application fee on all incentive schemes; application fee
reduced for duty neutralization schemes; target to implement e-Trade
Project in a time bound manner to bring all stakeholders including Customs,
DGFT, Banks, Ports, Airlines etc. on a common platform; Duty
Neutralization Schemes such as Advance authorization and EPCG schemes
brought under E-commerce mechanism;
 To promote Brand India through six or more “Made in India” Shows, to be
organized across the World every year;
 Back-up guarantee made available to ECGC (Export credit Guarantee
corporation) to the extent of Rs 350 crore to enable it to provide guarantees
for exports to difficult markets/ products. ECGC is now able to widen its
coverage;
 Additional funds provided to the Ministry of Textiles to clear the backlog
claims of textile units under Technology Upgradation Fund (TUF);
44

 Additional resources made available under MDA (Marketing Development


Assistance) and MAI (Market Access Initiative) Schemes;
 Additional items allowed within the existing duty free imports entitlement
for the following employment oriented sectors:
 5 additional items for sports goods sector;
 Additional items for leather garments and footwear and textile items.
 Fringe Benefit Tax (FBT) abolished;
 Sections 10A and 10B (Sunset clauses for STPI and EOUs schemes
respectively), extended for the financial year 2010-2011. Anomaly removed
in Section 10AA relating to taxation benefit of ‘unit vis-à-vis assessee’;
 Time period for filing refund claim increased to 1 year from the date of
export (as against half-yearly).
 For Fast Track Resolution of a number of procedural issues thereby
reducing delays for the exporters, a Committee constituted under the
Chairmanship of Finance Secretary including Secretaries of Department of
Revenue and Commerce; A number of issues sorted out accordingly;
 A Committee under the Chairmanship of Finance Secretary has been
constituted to resolve all problems related to Non-availability of Dollar
Credit to exporters by the concerned Banks;
 To enable support to Indian industry and exporters, especially the MSMEs,
in availing their rights through trade remedy instruments, a Directorate of
Trade Remedy Measures proposed to be set up;
 Excise duty reduced across the board by 4 per cent, for all products except
petroleum products and those products where current rate was less than 4%.
Excise Duty was further reduced by another 2% on certain products like
Leather etc.;
 The guarantee cover under Credit Guarantee Scheme for Micro and Small
Enterprises on loans doubled to Rs. 1 crore, with a guarantee cover of 50%.
The guarantee cover extended by Credit Guarantee Fund Trust increased to
85% for credit facility up to Rs. 5 lakh. The lock-in period for such
collateral-free loans reduced.
 Adjustment Assistance Scheme, initiated in December 2008 to provide
enhanced ECGC cover at 95% to the badly hit sectors, continued till March,
2010;
 To protect the domestic manufacturing industry from dumped/cheap
imports, in particular, from China, import restrictions imposed on some
items like auto forged components, HR coil, Carbon Black, Polyester
Filament Yarn (PFY) and Radial Tyres (Bus & Trucks); subsequently
withdrawn for PFY, HR Coils and Carbon black.
 Mega Handloom clusters in West Bengal and Tamil Nadu and Power loom
cluster in Rajasthan and New Mega clusters for carpets in Srinagar and
45

Mirzapur approved; Jaipur, Srinagar and Anantnag recognized as ‘Towns of


Export Excellence’ for handicrafts; Kanpur, Dewas and Ambur recognized
for leather products; and Malihabad for horticultural products;
 Basic customs duty of 5% on Rough / Un-worked corals abolished;
 Regular monitoring mechanism:-
 The situation is regularly monitored at the highest level of
Government, so that immediate further corrective measures, can be
taken as may be required. In this regard, the Government constituted
the following Two High Level Committees for deliberating the
issues on regular basis:
 An Apex Group chaired by Prime Minister with Finance Minister,
Commerce Minister, Deputy Chairman (Planning Commission), and RBI
Governor;
 Committee of officers chaired by Cabinet Secretary, including Finance
Secretary, Commerce Secretary, Secretary(DIPP), Secretary (Planning
Commission) - to meet regularly to look into the suggestions made by Trade
and Industry, and the respective Administrative Ministries in respect of the
current global economic and financial crisis, and to recommend action to
the Apex Group.
 Department of MSME and Department of Financial Services to jointly
monitor the progress of the monthly meetings of State level Bankers’
Committee for resolution of credit issues of MSME.
(ii) Measures taken by RBI: (Announced by RBI in the Monetary and
Credit Policies)
(a) Increase in Liquidity to the Banks for Improving Credit Flow by
 Reducing CRR, SLR, Repo rate and Reverse Repo rate (from Oct ’08, CRR
reduced from 9% to 5% (now modified to 5.5% on 13.02.10 and to be
enhanced to 5.75% w.e.f. 27.2.2010), SLR reduced from 25% to 24%
(restored to 25% in Oct.’09), Repo Rate reduced from 7.5% to 4.75%, and
Reverse Repo Rate reduced from 6% to 3.25%).
 Refinance facility to the EXIM Bank for an amount of Rs. 5000 crore for
providing pre-shipment and post-shipment credit in Rupees or US Dollars;
 A special re-finance facility put in place for banks for the purpose of
extending finance to exports, micro and small enterprises, mutual funds and
NBFCs. Provisioning requirements had been lowered. Export Credit
Refinance facility for commercial banks increased to 50% (now restored to
15% on 27.10.2009) of the outstanding Rupee Export Credit.
(b) Increase in FOREX Liquidity
 RBI’s assurance for continued selling of foreign exchange (US $) through
banks, to augment supply in the domestic foreign exchange market;
46

 Interest rates on export credit in foreign currency have been reduced to


LIBOR + 200 basis points in February 2010 from the earlier LIBOR+350
basis points.
(c) Easing of Credit Terms
 The period of pre-shipment and post-shipment Rupee Export Credit is
enhanced by 90 days each;
 Time period of export realization for non-status holder exporters increased
to 12 months, at par with the Status holders. This facility which was
available up to 03.06.09 has been extended for one more year.
 PSU Banks, consequent to measures announced by RBI, reduced the margin
money on Guarantees for export units.

IV. Impact of Global Financial Crisis on Indian Economy


through Trade Channel
1.9 Impact through Exports
1.9.1 World Income and Exports

The outlook for international trade was strongly affected during the global
financial crisis, and world trade performance weakened considerably from the last
quarter of 2008. The rising trend witnessed in the growth of world trade was
reversed during the crisis, and it fell sharply and traversed to the negative zone
from the fourth quarter of 2008. Advanced economies led this sharp deterioration
in the initial period; however, the emerging and developing economies also caught
the downswing.
The contracting external demand from advanced economies on account of
falling disposable income and heightened uncertainty spilled over to emerging
markets and developing countries, concomitantly manifested in the declining
international trade of these countries. India’s merchandise trade was also impacted
by the falling consumption, particularly in advanced countries, and the slump in
trade credit following tightening of international credit market conditions in the
aftermath of the collapse of Lehman Brothers in USA in mid-September 2008.
The cyclical co-movements between growth in India’s exports and external
demand (GDP in world and advanced economies) were highly synchronised during
47

the current global crisis. This shows that during normal times, other factors besides
world income also play a pivotal role in driving the growth in exports, while the
impact stemming from world GDP becomes overriding during a crisis.
In view of India’s exports being highly elastic to world income, the effect of
the contracting world income was reflected in the overall decline in merchandise
exports from the third quarter of 2008-09. As per the export demand function
estimated by Agarwala (1970), the income and price elasticity coefficients were
0.35 and -0.44, respectively. Another study by RBI (2003) found that short-term
and long-term elasticity of demand for India’s exports with respect to world GDP
growth was at 0.8 and 1.5, respectively. Further, with the latest data, the long-term
elasticity of India’s exports demand was estimated at 3.7 with respect to world
GDP (RBI, 2009). This confirms that with high global growth, the pull factor
operating on India’s exports could be sizeable. The high income elasticity of
exports with respect to world income is reflected across commodities, with their
elasticity improving significantly during the reform period (1993-2008) compared
with the 1980’s.
1.9.2 Export and Economic Growth
As discussed in the previous section, despite the dominant role of domestic
demand in shaping the growth path, the role of trade in conditioning the growth
process became increasingly important over time, which was also evident from a
significant rise in the trade-GDP ratio in the recent period. The direct impact of
exports on economic growth could be determined by trade openness and the
acceleration in the growth of exports, which in turn could be determined by the
elasticity of exports with respect to world income.
Within the framework of growth accounting, the contribution of exports to
economic growth was negligible during the first two decades after independence.
Though it showed some improvement in the 1970s, this could not be sustained
during the 1980s. During the reform period, the contribution of exports to
economic growth increased during the 1990s, and more than doubled during the
2000s. It was 2.7% during 2003-08, 4.2% in 2008-09, and -3.9% during 2009-10.
48

In order to further explore the relationship between exports and growth, the
Granger causal analysis between GDP growth and exports growth, and trade
deficit to GDP ratio was undertaken based on annual data during 1950-2008. The
Granger Causality results provided two insights: first, the direction of causal
relation between exports and GDP growth rates was from the former to the latter
but not vice versa and, second, the direction of the causal relationship between the
trade deficit ratio and economic growth was from the latter to the former, which is
attributable to the role of imports demand driven by domestic economic activity.
The compositional shift in the exports baskets towards technology-intensive
commodities during the past few years, spurred by the prominence of exports in
the Indian economy, is reflected in their increased contribution to growth.
1.9.3 Exports and Consumption
The direct contribution of exports to aggregate demand assumed a critical
mass and has become a crucial conduit of the trade channel of transmission.
Several domestic and external developments which followed the global crisis
contributed to the moderation of private consumption growth. Apart from the
direct impact of exports on aggregate demand and growth, exports could indirectly
affect growth through consumption and investment. In India, exports and private
consumption demand seem to have displayed a close relationship during the recent
period.
There could be a number of indirect channels through which export demand
could affect consumption. First, the manufacturing sector has become export-
intensive over the period. The share of manufactured exports in manufacturing
GDP in India has risen from 27.1 per cent in 1990-91 to 52.2 per cent in 2000-01,
and further to 72.3 per cent in 2008-09. This significant export-orientation of
manufacturing has also exposed the sector to external demand shocks.
Furthermore, a large part of manufacturing exports (42 per cent) is accounted for
by leather and manufactures, textile and textile products, gems and jewellery, and
handicrafts, which are employment-intensive, and a major part of exports in these
sectors is contributed by small and medium enterprises (SMEs). Thus, an external
demand shock has a larger impact on output and employment in such industries,
49

which has a direct bearing on domestic consumption demand. Furthermore, there


are a number of small and medium enterprises (SMEs) that are dependent on the
supply chain of the manufacturing export firms, which are also indirectly affected
by the external demand shocks.
1.10 Impact on Exports: Trend and Composition
The trade channel of the contagion that intensified in the post-September
2008 phase of the global financial crisis adversely impacted India’s merchandise
trade, with exports declining with greater intensity and more swiftly than during
the recession of the early 2000s, in tandem with the steeper recession in the
developed countries.
During 2008-09, the deceleration in growth of exports was modest in the
case of manufacturing goods. As a result, share of non-oil exports as well as
manufacturing goods exports in total exports increased by around 8 percentage
points during 2008-09 over the past year. In sum, this implies the cost
competitiveness of the manufacturing sector on account of enhanced efficiency
and productivity. At a more disaggregated level, the major commodities that
witnessed a decline in exports during 2008-09 were handicrafts, petroleum
products, ores and minerals, and agricultural and allied products. The global crisis,
however, had a more pronounced impact on India’s exports during 2009-2010
(April-September). All sectors including engineering, chemicals, gems and
jewellery, and petroleum exports witnessed a decline in export growth.
1.10.1 Impact on Direction of Exports
An empirical analysis is undertaken to assess how the broad direction of
India’s exports to emerging market economies relative to developed countries was
determined by the relative price competitiveness effect and real demand
conditions. The long-run elasticity of the direction of India’s exports with respect
to relative price was statistically significant and positive at 1.88, higher than the
almost unitary elasticity coefficient with respect to relative real demand
conditions. However, a significant structural shift since 1991-92 in the model led
to a significant moderation of the relative price effect and improvement in the
relative real demand effect. The price elasticity coefficient was reduced to 0.49,
50

while the real demand effect improved to 1.44. The contraction in India’s exports
since October 2008 was mainly conditioned by real demand effects emanating
from the sharp fall in real activities in advanced and emerging market economies
during the current global crisis (Reserve Bank of India. 2010. Report on Currency
and Finance 2008-09).
1.10.2 Leading Exports by Commodities and Firms
Engineering goods exports have assumed critical proportion in merchandise
exports of India during the post-reforms period. The critical role of engineering
and chemicals goods exports was evident during the global crisis. The exports of
engineering goods maintained their growth momentum in 2008-09, with a
significant acceleration in the growth of transport equipment. The exports of
chemicals also remained resilient in 2008-09, albeit with some moderation in
growth. The expansion of exports in these two sectors in 2008-09 accounted for
the overall expansion of India’s total exports in 2008-09. In 2009-10 (April-
September), the decline in engineering goods exports accounted for about a half of
the decline in manufactured exports, and a third of India’s total exports.
The significance of the engineering goods, chemicals and textiles industries
within the manufacturing sector is evident from their principal economic
characteristics. According to the Annual Survey of Industries (ASI) 2007-08 of the
Central Statistical Organisation (CSO), the engineering goods sector accounted for
about a third of aggregate investment, output, value added, and employment in the
manufacturing sector. Engineering goods, chemicals, and textiles together
accounted for 55 to 60 per cent of investment, output, value added, and
employment in the manufacturing sector. The textiles sector, the third sector in
importance after engineering and chemicals, accounted for 10 per cent of
investment, 7.2 per cent of output, 6.3 per cent of value added, and over 22 per
cent of employment. Therefore, engineering goods assume a critical proportion in
the growth of the manufacturing sector in India, and the relative resilience
displayed by the performance of engineering goods exports somewhat insulated
the Indian industry from the shocks stemming from sagging external demand
during the crisis (ibid.).
51

In order to further ascertain the role of the trade channel in India’s growth,
firm-level export orientation information was examined. The firm level export
orientation also demonstrates the growing importance of trade channels in the
growth of India’s manufacturing sector. An analysis of 1,500 companies from the
CMIE database showed that the number of companies with exports-to-sales ratios
of 20 per cent or above more than doubled between 1993-94 and 2007-08. Their
share in manufacturing exports also increased substantially during this period. This
trend in firm-level export orientation was the outcome of the increasing
internationalisation of Indian companies. On the back of an increased export
orientation, the global shocks spilled over to firms in the manufacturing sector
through declining external demand for their products from the third quarter of
2008-09 (ibid.).
1.11 Impact through Imports
Merchandise imports also caught the global downswings in the second half
of 2008-09, offsetting part of the adverse impact of contracting exports. The
growth in India’s imports plunged sharply during the third quarter of 2008-09, and
subsequently contracted from the last quarter of 2008-09 to 2009-10 (April-
September). A massive weakening of imports was witnessed in the case of crude
oil, capital goods, and gold and silver.
Imports, especially those of capital goods, are often considered a leading
indicator of industrial activity and the near-term investment climate. A sizeable
portion of imports gets channelised as inputs for industrial production. A definite
relationship between imports and industrial production, however, may be difficult
to establish as imported commodities could be either complements or substitutes to
domestic industry. As a result, an empirical test of these relations remains largely
country-specific. In the Indian case, however, non-oil imports, thus far, have been
mostly in the form of capital goods, raw materials and intermediate goods, which
complement industrial production.
An analysis of import elasticity of output in India suggests that imports
have grown at a much faster rate with respect to GDP in the 1990s compared to the
1980s, which is consistent with the liberalisation of external trade. The vital
52

importance of imports for the producing sector was evident from the firm-level
evidence. According to the CMIE database, the top 100 importing companies
accounted for about half of the manufacturing exports in the late 1990s. By 2008,
these companies accounted for 80 per cent of manufacturing exports. The import
intensity of these firms, as percentage to sales, almost doubled during 1999 to
2008 (ibid.).

V. Heartening Rebound in World Trade


1.12 World Trade by Regions
The World Trade Oranisation, in a recent report, has said that global trade is
set to rebound in 2010 by 9.5 per cent, after witnessing the sharpest decline in 70
years during 2009 (Source: The Hindu, 5 April 2010).
Text Table 1.4: World Merchandise Trade by Regions, 2007-2009
(Annual % change at constant prices 2005 calculated in terms of trade volume)

Exports Imports
Region / Country
2007 2008 2009 2007 2008 2009
1 2 3 4 5 6 7
World 6.4 2.1 -12.2 6.1 -2.2 -12.9
North America 4.8 2.1 -14.4 2.0 -2.4 -16.3
United States 6.7 5.8 -13.9 1.1 -3.7 -16.5
South and Central America* 3.3 0.8 -5.7 17.6 13.3 -16.3
Europe 4.2 0.0 -14.4 4.4 -0.6 -14.5
European Union (27) 4.0 -0.1 -14.8 4.1 -0.8 -14.5
Common Wealth of Independent States (CIS) (12) 7.5 2.2 -9.5 19.9 16.3 -20.2
Africa 4.8 0.7 -5.6 13.8 14.1 -5.6
Middle East 4.5 2.3 -4.9 14.6 14.6 -10.6
Asia 11.7 5.5 -11.1 8.2 4.7 -7.9
China 19.8 8.6 -10.5 13.8 3.8 2.8
Japan 9.4 2.3 -24.9 1.3 -1.3 -12.8
India 14.4 14.4 -6.2 18.7 17.3 -4.4
Newly industrialised economies(4)** 9.0 4.9 -5.9 5.3 3.5 -11.4

* Includes the caribbean


** Hong Kong, China; Republic of Korea; Singapore; and Chinese Taipei.
Source: WTO Secretariat, as published in The Hindu dated April 5, 2010.

Exports from developed countries are expected to increase by 7.5 per cent
in volume terms over the rest of the year (2010). Exports from the rest of the world
(including developing economies) will go up by 11 per cent.
These projections are in line with the overall growth estimates for the
current year.
53

All international organisations expect the developing economies to be in the


forefront of global economic recovery. A robust expansion in global trade is one of
the key ingredients of the economic recovery.
To place this in its proper perspective, it must be noted that while trade is
expanding at a fast clip this year, it will not be quite sufficient to recover the
ground lost in 2009. Last year, trade contracted by 12.2 per cent, the largest
decline since World War II.
The WTO, which compares trade volumes rather than the value of trade –
there will be no distortions due to exchange rate or commodity price variations –
says it will take another year of fast trade volume growth to surpass the level of
2008. On a positive note, a report prepared jointly by the WTO, the Organisation
for Economic Co-operation and Development (OECD), and the United Nations
Conference on Trade and Development (UNCTAD) says that the feared surge in
protectionism has not happened even as economic recovery is proceeding apace.
However, in the U.S. and a few other developed countries, it has been
mostly a jobless recovery.
If the recovery does not make a dent in unemployment numbers, there will
be a clamour for protection. But on the whole the multilateral system of trade
under the WTO has enabled an orderly conduct of trade both during the recession
and the recovery phase. The WTO report found fewer instances of protectionism,
at least in the recovery phase. It was a threat during the down turn.
Most countries have managed the political process of keeping protectionism
at bay despite growing unemployment and shrinkage of employment opportunities.
Over the past six months, the number of restrictions on international trade has
dropped sharply. Member countries of the WTO have resorted to emergency
measures to block imports on fewer occasions. Such measures included anti-
dumping levies, recourse to special safeguards mechanism, and imposition of
countervailing duties. However, critics of the report contend that protectionism
exists but in less traditional forms. For instance, the bailout of financial institutions
and car companies, and “Buy American” procurement rules in the U.S are cited as
examples of protectionism. The failure to move ahead with the Doha round of
54

trade talks is perhaps the most relevant example of lack of commitment among
industrialised countries to free trade.
1.13 Sharp decline in 2009
The decline in trade volumes during 2009 was larger than the 10 per cent
forecast earlier by the WTO. In dollar terms, the extent of fall was greater than the
fall in volume terms (-23 per cent). To a large extent, that was due to fall in the
prices of oil and other primary commodities. The U.S. dollar is used extensively in
invoicing trade in these commodities.
The principal cause has been a sharp fall in global demand. In rich
countries, private demand was weak, a direct consequence of the financial crisis.
Also, trade finance practically dried up, and that in turn weakened demand
further. This was aggravated by the synchronized decline across many countries.
No region or group of countries was spared. Exports and imports of
countries fell at the same time.
Also, at the height of the recession, households postponed buying of
consumer durables and corporates deferred investing in capital goods.
Two other factors that aggravated the decline were the large global supply
chains and the fact that some products have a disproportionately large share of
world trade compared with their share in overall output.
The spread of global supply chains most probably exaggerated the fall in
trade. This is because goods cross national boundaries several times in their
production process leading to inflated trade statistics, both during trade booms and
sharp declines.
Some products, notably consumer durables, account for a significant
percentage of trade. But their contribution to the GDP is much less. A decline in
the trade of such goods has a significant impact on trade statistics but much less on
gross output. World trade and output are now in a recovery phase. According to
the WTO, without any further upheavals in the global economy, world
merchandise trade should resume its normal upward trajectory through the end of
2010, although some deviation from its previous trend line will persist for a long
time.
55

The WTO concedes that its trade forecasts may be overoptimistic.


There may be a large appreciation or depreciation of currencies, and the
resultant volatility in foreign exchange markets is not good for orderly trade. There
could be a further rise in oil prices.
World merchandise exports after declining for a year witnessed a turn
around in November 2009. According to the latest monthly data available from
International Monetary Fund’s (IMF) International Financial Statistics (IFS), since
November 2009, the exports of the world, emerging and developing economies,
and advanced economies have been following a continuous rising trend. Its
influence is felt on India as well with the growth of exports becoming positive
from October 2009, and moving faster from November 2009, and growth of
imports becoming positive from November 2009, and moving faster from
December 2009 (Table 1.1-C and Fig. 1.2) (Reserve Bank of India Bulletin, August
2010, p. 1693).

VI. Summing Up

The chapter covers the trends in the composition and direction of foreign
trade of India during 1995-2010, gives a gist of recent foreign trade policies from
2004, deals with the impact of global financial crisis on India’s foreign trade
during 2008-10, lists measures taken by Government of India and Reserve Bank of
India during the period of recession, and reviews the global trends in merchandise
trade during 2007-10. India’s efforts at diversification of export and import
baskets, and export and import markets are in the desirable directions. Enhancing
competitiveness of Indian enterprises for facing competition in the global markets,
and also within the country is a pre-requisite for the success of enterprises. It is
important that the Government of India in close consultation with industry
associations periodically monitors global industrial environment, and takes
appropriate measures for safeguarding the Indian industry in the era of greater
integration with the global economy.
56

Table 1.1(A-1): Trends in India's Foreign Trade (1950-51 to 2009-10) - Year-wise and Plan Period-wise
(Value in Rs. crore)
Exports Exports Imports
Total Trade
Year Exports % change Imports % change (% to (% to (% to
Trade Balance
Imports) GDP) GDP)
1 2 3 4 5 6 7 8 9 10
1950 -51 606 608 1214 -2 99.67 6.27 6.29
I PLAN
1951 -52 716 18.15 890 46.38 1606 -174 80.45 7.01 8.72
1952 -53 578 -19.27 702 -21.12 1280 -124 82.34 5.72 6.95
1953 -54 531 -8.13 610 -13.11 1141 -79 87.05 4.84 5.56
1954 -55 593 11.68 700 14.75 1293 -107 84.71 5.71 6.74
1955 -56 609 2.70 774 10.57 1383 -165 78.68 5.75 7.31
Annual
605 -0.17 735 20.89 1341 -130 82.65 5.81 7.06
Average
II PLAN
1956 -57 605 -0.66 841 8.66 1446 -236 71.94 4.82 6.70
1957 -58 561 -7.27 1035 23.07 1596 -474 54.20 4.36 8.04
1958 -59 581 3.57 906 -12.46 1487 -325 64.13 3.80 5.99
1959 -60 640 10.15 961 6.07 1601 -321 66.60 4.03 6.05
1960 -61 642 0.31 1122 16.75 1764 -480 57.22 3.69 3.45
Annual
606 0.17 973 32.38 1579 -367 62.82 4.14 6.05
Average
III PLAN
1961 -62 660 2.80 1090 -2.85 1750 -430 60.55 3.58 5.92
1962 -63 685 3.79 1131 3.76 1816 -446 60.57 3.46 5.70
1963 -64 793 15.77 1223 8.13 2016 -430 64.84 3.48 5.37
1964 -65 816 2.90 1349 10.30 2165 -533 60.49 3.07 5.08
1965 -66 810 -0.74 1409 4.45 2219 -599 57.49 2.88 5.03
Annual
753 24.26 1240 27.44 1993 -488 60.79 3.29 5.42
Average
ANNUAL
PLANS
1966 -67 1157 42.84 2078 47.48 3235 -921 55.68 3.65 6.55
1967 -68 1199 3.63 2008 -3.37 3207 -809 59.71 3.23 5.41
1968 -69 1358 13.26 1909 -4.93 3267 -551 71.14 3.45 4.85
Annual
1238 64.41 1998 61.13 3236 -760 62.18 3.44 5.60
Average
IV PLAN
1969 -70 1413 4.05 1582 -17.13 2995 -169 89.32 3.26 3.65
1970 -71 1535 8.63 1634 3.29 3169 -99 93.94 3.32 3.53
1971 -72 1608 4.76 1825 11.69 3433 -217 88.11 3.25 3.69
1972 -73 1971 22.57 1867 2.30 3838 104 105.57 3.61 3.42
1973 -74 2523 28.01 2955 58.28 5478 -432 85.38 3.80 4.45
Annual
1810 46.20 1973 -1.25 3783 -163 92.46 3.45 3.75
Average
V PLAN
1974 -75 3329 31.95 4519 52.93 7848 -1190 73.67 4.24 5.76
1975 -76 4036 21.24 5265 16.51 9301 -1229 76.66 4.79 6.25
1976 -77 5142 27.40 5074 -3.63 10216 68 101.34 5.67 5.59
1977 -78 5408 5.17 6020 18.64 11428 -612 89.83 5.26 5.86
1978 -79 5726 5.88 6811 13.14 12537 -1085 84.07 5.14 6.12
Annual
4728 161.22 5538 180.69 10266 -810 85.11 5.02 5.92
Average
(Contd.)
57

Table 1.1(A): Trends in India's Foreign Trade (1950-51 to 2009-10) (Contd.)


(Value in Rs. crore)
Exports Exports Imports
Total Trade
Year Exports %change Imports %change (% to (% to (% to
Trade Balance
Imports) GDP) GDP)
1 2 3 4 5 6 7 8 9 10
ANNUAL
PLAN
1979-80 6418 12.09 9143 34.24 15561 -2725 70.2 5.25 7.48
VI PLAN
1980 -81 6711 4.60 12549 37.25 19260 -5838 53.48 4.62 8.63
1981 -82 7806 16.32 13608 8.44 21414 -5802 57.36 4.57 7.97
1982 -83 8803 12.77 14293 5.03 23096 -5490 61.59 4.61 7.48
1983 -84 9771 11.00 15831 10.76 25602 -6060 61.72 4.39 7.12
1984 -85 11744 20.19 17134 8.23 28878 -5390 68.54 3.87 6.87
Annual
8967 89.66 14683 165.13 23650 -5716 60.54 4.41 7.61
Average
VII PLAN
1985 -86 10895 -7.23 19658 14.73 30553 -8763 55.42 3.87 6.99
1986 -87 12452 14.29 20096 2.23 32548 -7644 61.96 3.96 6.38
1987 -88 15674 25.88 22244 10.69 37918 -6570 70.46 4.38 6.22
1988 -89 20232 29.08 28235 26.93 48467 -8003 71.66 4.77 6.65
1989 -90 27658 36.70 35328 25.12 62986 -7670 78.29 5.67 7.24
Annual
17382 93.84 25112 71.03 42494 -7730 67.56 4.53 6.70
Average
ANNUAL
PLANS
1990 - 91 32553 17.70 43198 22.28 75751 -10645 75.36 5.72 7.39
1991 - 92 44041 35.29 47851 10.77 91892 -3810 92.04 6.73 7.31
Annual
Average 38297 120.33 45525 81.29 83821.5 -7227.5 83.70 6.23 7.35
VIII PLAN
1992 - 93 53688 21.90 63375 32.44 117063 -9687 84.71 7.13 8.42
1993 - 94 69751 29.92 73101 15.35 142852 -3350 95.42 8.06 8.45
1994 - 95 82674 18.53 89971 23.08 172645 -7297 91.89 8.14 8.86
1995 - 96 106353 28.64 122678 36.35 229031 -16325 86.69 8.92 10.29
1996 - 97 118817 11.72 138920 13.24 257737 -20103 85.53 8.62 10.08
Annual
Average 86257 125.23 97609 114.41 183865.6 -11352.4 88.85 8.17 9.22
IX PLAN
1997 - 98 130100 9.50 154176 10.98 284276 -24076 84.38 8.52 10.10
1998 - 99 139752 7.42 178332 15.67 318084 -38580 78.37 7.98 10.18
1999 - 00 159561 14.17 215236 20.69 374797 -55675 74.13 8.15 11.04
2000 - 01 203571 27.58 230873 7.27 434444 -27302 88.17 9.58 10.86
2001 - 02 209018 2.68 245200 6.21 454218 -36182 85.24 9.17 10.76
Annual
Average 168400 95.23 204763.4 109.78 373163.8 -36363 82.06 8.68 10.59
X PLAN
2002 - 03 255137 22.06 297206 21.21 552343 -42069 85.85 10.39 12.11
2003 - 04 293367 14.98 359108 20.83 652475 -65741 81.69 10.65 13.04
2004 - 05 375340 27.94 501065 39.53 876405 -125725 74.91 11.92 15.91
2005 - 06 456418 21.60 660409 31.80 1116827 -203991 69.11 12.73 18.41
2006 - 07 571779 25.28 840506 27.27 1412285 -268727 68.03 13.85 20.30
Annual
Average 390408 131.83 531658.8 159.65 922067 -141251 75.92 11.91 15.95
XI PLAN
2007 - 08 655864 14.71 1012312 20.44 1668176 -356448 64.79 14.44 22.29
2008 - 09 840755 28.19 1374436 35.77 2215191 -533681 61.2 16.08 26.29
2009 - 10 (R) 845125 0.52 1356469 -1.31 2201594 -511343 62.3 na na
(Concld.)
58

R: Revised
Sources: 1) Reserve Bank of India (2009), Handbook of StatIstics on Indian Economy 2008-09 , Mumbai.
www.rbi.org.in
2) RBI (2010), Reserve Bank of India Bulletin, vol.64 No.8, August 2010, p. s 848.
3) Economic Survey 2009-10 , Government of India, New Delhi, and earlier Issues.
4) Exports and Imports as % of GDP obtained from CMIE volume on Foreign Trade and Balance
of Payments , October 2009. Wherever necessary, figures have been updated, using RBI sources.

Table 1.1(A-2): CAGR for Exports and Imports (%)

Value in Rs. crore Value in US $ million


Period
Exports Imports Exports Imports
1994-00 14.05 19.06 6.94 11.63
1999-05 18.66 18.41 17.80 17.56
1994-05 16.33 18.74 12.24 14.56
2004-09 22.34 28.69 22.04 28.46
2002-08 20.78 27.78 25.35 32.59
59

Table 1.1(B-1): Trends in India's Foreign Trade (1960-2010)


(broad periods up to 1994-95, and year-wise thereafter)
(Value in US $ million)
Trade Exports Imports (% Exports Imports
Year Exports Imports
Balance (% change) change) (% to GDP) (% to GDP)
1 2 3 4 5 6 7 8
1960-61 1346 2353 -1007 0.2 16.7 3.69 6.45
1970-71 2031 2162 -131 8.8 3.5 3.32 3.53
1980-81 8486 15869 -7383 6.8 40.2 4.62 8.63
1990-91 18143 24075 -5932 9.2 13.5 5.72 7.39
1994-95 26330 28654 -2324 18.4 22.9 8.14 8.86
1995-96 31797 36678 -4881 20.8 28.0 8.92 10.29
1996-97 33470 39133 -5663 5.3 6.7 8.62 10.08
1997-98 35006 41484 -6478 4.6 6.0 8.52 10.1
1998-99 33218 42389 -9171 -5.1 2.2 7.98 10.18
1999-00 36822 49671 -12849 10.8 17.2 8.15 11.84
2000-01 44560 50536 -5976 21.0 1.7 9.58 10.86
2001-02 43827 51413 -7587 -1.6 1.7 9.17 10.76
2002-03 52719 61412 -8693 20.3 19.4 10.39 12.11
2003-04 63843 78149 -14307 21.1 27.3 10.65 13.04
2004-05 83536 111517 -27981 30.8 42.7 11.92 15.91
2005-06 103091 149166 -46075 23.4 33.8 12.73 18.41
2006-07 126414 185735 -59321 22.6 24.5 13.87 20.37
2007-08 163132 251654 -88522 29 35.5 13.9 21.4
2008-09 185295 303696 -118401 13.6 20.7 16 26.2
2009-10(R) 178662 286823 -108161 -3.6 -5.6 na na

Table 1.1(B-2): CAGR for Exports and Imports (%)

Value in US $ million Value in Rs. crore


Period
Exports Imports Exports Imports
1994-00 6.94 11.63 14.05 19.06
1999-05 17.80 17.56 18.66 18.41
1994-05 12.24 14.56 16.33 18.74
2004-09 22.04 28.46 22.34 28.69
2002-08 25.35 32.59 20.78 27.78

Notes: R : Revised
1. % change mentioned in columns 5 and 6 is over the previous year for all years.
2. One US $ equals around Indian Rs.47 in 2010.
3. One billion equals 1000 millions or 100 crores; one million equals 10 lakhs.
4. CAGR (Compound Annual Growth Rate) is worked out for specified periods
of a few years indicating the annual average during each period, whereas change
of one year over the previous year is presented annually. Both are expressed as
percentages, and refer to annual changes. For purposes of analysis, per cent
change and per cent share are extensively used.
5. Karl Pearson's correlation coefficient (r): between % change in exports and imports
for the period 1994-95 to 2009-10 (in terms of values in US $) reveals very high
degree of positive correlation between the two variables ---- r = 0.8671.

Sources: 1) GOI, Economic Survey 2009-10 , and earlier issues, New Delhi.
2) Reserve Bank of India (RBI) (2010), Reserve Bank of India Bulletin, Vol.64 No.8,
August 2010, p. S 849.
3) Exports and Imports as % of GDP obtained from CMIE volume on Foreign Trade
and Balance of Payments, October 2009. Wherever necessary, figures have been
updated using RBI sources.
60

Table 1.1(C): India's Foreign Trade - Annual and Monthly (2004-10)

(in US $ million)
Year/month Export Import Trade Balance
1 2 3 4
2004-05 83536 (30.8) 111517 (42.7) -27981
2005-06 103091 (23.4) 149166 (33.8) -46075
2006-07 126414 (22.6) 185735 (24.5) -59321
2007-08 163132 (29.0) 251654 (35.5) -88535
2008-09 185295 (13.6) 303696 (20.8) -118401
2009-10 (R) 178662 (-3.6) 286823 (-5.6) -108161
2007-08
April 11327 18371 -7044
May 12456 21150 -8694
June 12101 20016 -7915
July 12513 21129 -8616
August 12641 20366 -7725
September 12521 18217 -5696
October 14675 21833 -7158
November 12909 22104 -9195
December 14625 20117 -5492
January 14889 22844 -7955
February 15116 20804 -5688
March 17254 23574 -6320
2008-09
April 18460 (63.0) 30317 (65.0) -11857
May 18687 (50.0) 29444 (39.2) -10757
June 19181 (58.5) 28951 (44.6) -9770
July 19030 (52.1) 31625 (49.7) -12595
August 17759 (40.5) 33523 (64.6) -15764
September 15789 (26.1) 31136 (70.9) -15347
October 14131 (-3.7) 25869 (18.5) -11738
November 11163 (-13.5) 23488 (6.3) -12325
December 13368 (-8.6) 19456 (-3.3) -6088
January 12869 (-13.6) 18228 (-20.2) -5359
February 11941 (-21.0) 15062 (-27.6) -3121
March 12916 (-25.1) 16597 (-29.6) -3681
2009-10 (R)
April 12475 (-32.4) 19228 (-36.6) -6753
May 12316 (-34.1) 20011 (-32.0) -7695
June 13606 (-29.1) 23013 (-20.5) -9408
July 14341 (-24.6) 21683 (-31.4) -7343
August 13586 (-23.5) 22440 (-33.1) -8854
September 14624 (-7.3) 21464 (-31.1) -6840
October 14805 (4.8) 25390 (-1.9) -10585
November 14933 (33.8) 24787 (5.5) -9855
December 16512 (23.5) 28191 (44.9) -11679
January 15569 (21.0) 25245 (38.5) -9675
February 15717 (31.6) 25980 (72.5) -10263
March 20181 (56.2) 29391 (77.1) -9211

Notes: 1. Monthly data may not add up to the annual data on account of revision
in figures. (R): Revised
2. Figures in parentheses denote percentage variation over the corresponding
period of the previous year (year-on-year variation).
Source: Director General of Commercial Intelligence and Statistics (DGCI & S),
as published in Reserve Bank of India Bulletin , August 2010, Vol. 64
No. 8, p. S849.
61

Table 1.2: Indices of Quantity and Unit Value of Exports and


Imports
(Base : 1978-79 = 100)
Quantum Index Unit Value Index Net terms
Year
Exports Imports Exports Imports of trade
1 2 3 4 5 6
1969-70 55.7 64.9 44.0 35.2 125.0
1970-71 59.0 67.2 45.0 35.3 127.4
1971-72 59.2 80.6 46.0 32.8 140.2
1972-73 66.5 76.7 51.2 34.2 149.7
1973-74 69.5 87.2 62.2 48.9 127.2
1974-75 73.7 77.2 78.0 84.5 92.3
1975-76 81.7 76.0 83.9 99.1 84.7
1976-77 96.8 76.1 89.4 96.3 92.9
1977-78 93.2 100.0 100.3 88.0 114.0
1978-79 100.0 100.0 100.0 100.0 100.0
1979-80 106.2 116.4 105.4 114.1 92.4
1980-81 108.1 137.9 108.5 134.2 80.8
1981-82 110.1 150.6 124.1 133.1 93.2
1982-83 116.7 154.6 132.0 136.3 96.8
1983-84 113.0 185.4 151.0 125.8 120.0
1984-85 120.8 156.1 169.8 161.7 105.0
1985-86 111.3 182.3 170.8 158.8 107.6
1986-87 121.3 212.3 179.4 139.4 128.6
1987-88 140.0 204.8 195.4 160.0 122.1
1988-89 152.1 224.2 232.2 185.5 125.2
1989-90 174.9 227.8 276.6 228.4 121.1
1990-91 194.1 237.7 292.5 267.7 109.3
1991-92 208.6 228.0 369.5 309.1 119.5
1992-93 222.9 282.0 421.5 331.0 127.3
1993-94 257.5 329.1 474.1 327.2 144.9
1994-95 292.7 408.3 494.6 324.6 152.4
1995-96 384.3 514.8 484.2 351.0 137.9
1996-97 411.8 511.8 504.7 399.8 126.2
1997-98 386.0 562.1 589.4 404.2 145.8
1998-99 399.2 644.2 611.7 407.8 150.0
1999-2000 461.0 704.8 604.5 450.5 134.2
(Base : 1999-2000 = 100)
2000-01 125.0 99.0 102.0 109.0 94.0
2001-02 126.0 103.0 103.0 112.0 92.0
2002-03 150.0 109.0 106.0 128.0 83.0
2003-04 161.0 128.0 114.0 132.0 86.0
2004-05 179.0 150.0 131.0 157.0 83.0
2005-06 206.0 174.0 139.0 179.0 78.0
2006-07 227.0 191.0 158.0 206.0 77.0
2007-08 245.0 218.0 166.0 210.0 79.0
2008-09 267.0 262.0 194.0 239.0 81.0
Source: DGCI&S, obtained from Government of India, Ministry of
Finance, Economic division (2010), Economic Survey 2009-10 ,
and earlier issues, Oxford University Press, New Delhi.
62

Table 1.3(A): Composition of Principal Imports (1995-2010)


(in US $ million)
2008-09 2008-09 2009-10
Commodity Group 1995-96 2000-01 2005-06 2007-08
(April-Mar) (April-Sep.) (April-Sep)
1 2 3 4 5 6 7 8
I. Food and live animals chiefly for food
----- ----- ----- ----- ----- ----- -----
(excl. cashew raw), of which:
1. Cereals and cereal preparations 24 20 36 705 47 22 21
II. Raw materials and intermediate
----- ----- ----- ----- ----- ----- -----
manufactures
2. Cashewnuts (unprocessed) 227 211 472 426 581 409 361
3. Crude rubber (including synthetic and
reclaimed) 215 152 414 786 861 570 479
4. Fibres, of which: ----- ----- ----- ----- ----- ----- -----
4.1 Raw wool 145 100 204 271 225 153 94
4.2 Raw cotton 156 259 159 227 368 195 110
5. Petroleum, oil and lubricants
7526 15650 43964 79645 91316 63337 37338
6. Animal and vegetable oils fats, of which:
----- ----- ----- ----- ----- ----- -----
6.1 Edible oils 676 1334 2024 2559 3440 1458 2443
7. Fertizers and chemicals products, of
----- ----- ----- ----- ----- ----- -----
which:
7.1 Fertizers and fertilizer mfg 1683 664 1091 5044 12953 7571 3071
7.2 Chemicals 2811 338 8037 11522 2090 8857 6727
8. Non-metallic mineral manufactures, of
----- ----- ----- ----- ----- ----- -----
which:
8.1 Pearls, precious and semi precious
stones, unworked or worked 2106 4838 9135 7972 16554 10455 5432
9. Iron and steel 1446 781 4572 8689 9466 5128 3872
10. Non-ferrous metals 904 539 13162 21372 27544 20169 13059
III. Capital goods 8458 5534 23523 49007 47080 25411 17744
IV. Total Imports 36678 50536 149167 251654 303696 184996 124194

Source : GOI, Economic Survey 2009-10 , and earlier issues.


63

Table 1.3(B): Percentage Share of Principal Imports (1995-2010)

Percentage Share ( in terms of US $ million)


Commodity Group 2008-09 2008-09 2009-10
1995-96 2000-01 2005-06 2007-08
(April-Mar) (April-Sep) (April-Sep)
1 2 3 4 5 6 7 8
I. Food and allied
products, of which: neg 3.7 2.5 2.3 2.1 1.5 3.5
1. Cereals 0.1 neg ----- 0.3 0.0 0.0 0.0
2. Pulses 0.6 0.2 0.4 0.5 0.4 0.3 0.6
3. Cashew nuts 0.6 0.4 0.3 0.2 0.2 0.2 0.3
4. Edible oils 1.8 2.6 1.4 1.0 1.1 0.8 2.0
II. Fuel, of which na 33.2 32.1 34.2 33.4 37.3 33.2
5. Coal 20.5 2.2 2.6 2.6 3.3 3.1 3.1
6. POL 2.5 31.0 29.5 31.6 30.1 34.2 30.1
III. Fertilizers 4.6 1.5 1.3 2.0 4.3 4.1 2.5
IV. Paper board
manufactures &
newsprint 1.3 0.9 0.6 0.6 0.6 0.5 0.6
V. Capital goods, of
which: 28.2 11.0 15.8 19.5 15.5 13.7 14.3
7. Machinery except
elec & machine tool 10.7 5.4 7.4 8.8 7.8 7.3 8.2
8. Electrical machinery
except electronic goods
1.1 1.0 1.0 1.1 1.2 1.2 1.2
9. Transport
equipment 3.0 1.9 5.9 8.0 4.4 3.6 2.3
10. Project goods 6.5 1.5 0.6 0.5 1.1 0.8 1.7
VI. Others, of which: na 29.6 43.7 38.9 40.0 40.8 43.4
11. Chemicals 7.6 6.7 5.7 4.9 5.0 5.1 5.8
12. Pearls, precious
and semi-precious
stones 5.7 9.6 6.1 3.2 5.5 5.7 4.4
13. Iron & steel 3.9 1.4 3.1 3.5 3.1 2.8 3.1
14. Non-ferrous metals
2.5 1.1 1.2 1.4 1.9 2.6 1.2
15. Gold & Silver na 9.2 7.6 7.1 7.2 8.3 9.3
16. Professional
instruments, optical
goods, etc. 1.8 1.7 1.3 1.5 1.4 1.3 1.5
17. Electronic Goods 4.8 ----- 9.5 8.0 7.7 7.0 8.6
Total Imports 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Source : GOI, Economic Survey 2009-10 , and earlier issues.


neg: Negligible na : Not Avaliable
64

Table 1.3(C): Percentage Change of Principal Imports (1995-2010)

Percentage Change over the previous year ( in terms of US $ million)


Commodity Group 2008-09 2008-09 2009-10
1995-96 2000-01 2005-06 2007-08
(April-Mar) (April-Sep) (April-Sep)
1 2 3 4 5 6 7 8
I. Food and allied
products, of which: na -35.0 -4.7 8.5 9.1 9.7 52.9
1. Cereals -18.4 -91.3 36.8 -46.8 -93.3 32.6 -6.7
2. Pulses 8.5 33.4 41.3 55.2 -2.4 -10.3 40.0
3. Cashew nuts 3.2 -23.8 17.5 5.8 36.4 78.7 -11.9
4. Edible oils 240.1 -28.2 -17.9 21.4 34.4 4.7 67.6
II. Fuel, of which na 23.0 44.8 39.4 17.7 84.1 -40.3
5. Coal 27.0 9.7 21.0 40.4 55.5 99.3 -32.2
6. POL 30.6 24.1 47.3 39.4 14.7 22.8 -41.0
III. Fertilizers 59.9 -46.1 59.4 66.2 156.8 249.4 -59.4
IV. Paper board
manufactures &
newsprint 92.3 1.1 29.8 18.1 24.2 44.3 -29.0
V. Capital goods, of
which: 35.2 -7.3 62.5 62.7 -3.9 71.7 -30.2
7. Machinery except
elec & machine tool 43.8 -0.9 49.0 43.9 7.7 46.6 -24.2
8. Electrical machinery
except electronic goods
53.8 11.3 25.9 46.5 27.7 82.3 -29.1
9. Transport
equipments -0.7 -16.2 104.2 113.1 -34.3 134.9 -57.3
10. Project goods 29.0 -23.0 48.0 -28.0 146.6 142.1 35.3
VI. Others, of which: na -8.1 21.1 22.7 23.8 46.5 -28.6
11. Chemicals 21.8 -14.7 23.2 25.8 23.0 59.0 -23.3
12. Pearls, precious
and semi-precious
stones 29.2 -11.0 -3.1 6.5 107.7 122.2 -48.0
13. Iron & steel 24.2 -13.1 71.3 35.2 8.9 14.5 -24.5
14. Non-ferrous metals 25.9 -1.5 40.8 34.6 62.5 197.2 -69.1
15. Gold & Silver na 4.1 1.5 22.0 22.3 32.3 -24.9
16. Professional
instruments, optical
goods, etc. 36.0 -1.4 28.9 66.6 12.7 31.1 -22.7
17. Electronic Goods 42.7 na 32.5 26.5 15.3 31.1 -17.7
Total Imports 28.0 1.7 33.8 35.5 20.7 55.1 -32.9

Source : GOI, Economic Survey 2009-10 , and earlier issues.


65

Table 1.4(A): Composition of Principal Exports (1995-2010)


(in US $ million)
2008-09 2008-09 2009-10
Commodity Group 1995-96 2000-01 2005-06 2007-08
(April-Mar) (April-Sep) (April-Sep)
1 2 3 4 5 6 7 8 9
I. Agricultural and allied Products, of which: 6320 6256 10549 16202 16914 9955 6878
1. Raw cotton 61 448 656 2202 623 387 258
2. Tobacco 134 191 300 480 753 390 454
3. Spices 237 354 478 1072 1378 773 567
II. Ores and minerals (excl. coal), of which: 915 906 5361 9051 7726 4428 2851
4. Iron ore (million tonnes) 515 358 3801 5812 4724 2508 1685
III. Manufactured goods, of which: 23984 35181 74200 104618 123110 70559 52967
5. Textile fabrics & manufactures (excl. carpets
----- ----- ----- ----- ----- ----- -----
hand-made), of which:
6. Cotton yarn, fabrics, made-ups, etc. 2577 3509 3945 4653 4116 2353 1528
7. Readymade garments of all textile materials 3676 5577 8572 9687 10936 5409 4862
8. Leather & leather manufactures, incl. leather
footwear, leather travel goods & leather garments 1731 1951 2691 3396 3464 2016 1529
9. Handicrafts (incl. carpets hand-made), of
which: 6129 1116 1284 1434 1063 600 398
9.1 Gems and Jewellery 5275 7384 15529 19679 27958 17370 13596
10. Chemicals and allied products 2945 5002 11935 17371 18635 10238 8345
11. Machinery, transport & metal manufactures
including iron and steel 4358 6976 21315 37220 47155 27018 18239
IV. Mineral fuels and lubricants (incl.coal) 526 1931 11867 29030 27686 19397 10859
V. Total Exports 31797 44560 103092 163132 185295 108907 76589

Source : GOI, Economic Survey 2009-10 , and earlier issues.


66

Table 1.4(B): Percentage Share of Principal Exports (1995-2010)

Percentage Share (in terms of US $ million)


Commodity Group 2008-09 2008-09 2009-10
1995-96 2000-01 2005-06 2007-08
(April-Mar) (April-Sep) (April-Sep)
1 2 3 4 5 6 7 8
I. Agricullture &
allied, of which: 19.1 13.5 10.2 9.9 9.1 9.1 9.0
1. Raw Cotton 0.2 0.1 0.6 1.3 0.3 0.4 0.3
2. Unmfg. Tobacco 0.4 0.3 0.2 0.2 0.3 0.3 0.5
3. Spices 0.7 0.8 0.5 0.6 0.7 0.7 0.7
4. Cereals na 1.7 0.1 2.2 1.8 1.9 2.2
5. Oil Meals 2.2 1.0 1.1 1.2 1.2 1.0 0.9
6. Marine Products 3.2 3.1 1.5 1.1 0.8 0.7 1.0
II. Ores and Minerals,
of which: 3.7 2.6 5.2 5.5 4.2 4.1 3.7
7. Iron Ore 1.6 0.8 3.7 3.6 2.5 2.3 2.2
III. Manufactured
goods, of which: 74.7 78.0 72.0 64.1 66.4 64.8 69.2
8. Leather &
Manufactures 5.5 2.9 1.7 2.1 1.9 1.9 2.0
9. Leather footwear na 0.9 1.0 0.7 0.7 0.6 0.8
10. Gems &
Jewellerly 16.6 16.6 15.1 12.1 15.1 15.9 17.8
11. Drugs,
Pharmaceuticals &
fine chemicals 3.2 4.3 4.8 4.7 4.7 4.0 5.2
12. Cotton yarn, fabs,
made-ups, etc. 8.1 7.9 3.8 2.9 2.2 2.2 2.2
13. Readymade
Garments 11.6 12.5 8.3 5.9 5.9 5.0 6.3
14. Handicrafts na 3.1 1.2 0.3 0.2 0.2 0.1
15. Electronic Goods
na 2.4 2.1 2.1 3.9 3.5 4.0
16. Manufactures of
metals na 3.6 4.1 4.3 4.1 3.7 2.5
17. Machinery &
instruments na 3.7 4.7 5.6 5.9 5.4 6.1
18. Transport
equipments na 2.4 4.2 4.3 6.0 5.5 6.4
19. Primary & semi-
finished Iron & Steel na 2.0 2.9 2.5 2.6 3.1 1.5
IV. Crude & Petroleum
Products (incl.
Coal)
1.4 4.2 11.5 17.8 14.9 17.8 14.2
V. Other &
unclassified items na 1.7 1.1 2.5 4.0 4.0 3.9
Total Exports 100.0 100.0 100.0 100.0 100.0 100.0 100.0

Source : GOI, Economic Survey 2009-10 , and earlier issues.


67

Table 1.4(C): Percentage Change of Principal Exports (1995-2010)

Percentage Change over the previous year (in terms of US $ million)


Commodity Group 2008-09 2008-09 2009-10
1995-96 2000-01 2005-06 2007-08
(April-Mar) (April-Sep) (April-Sep)
1 2 3 4 5 6 7 8
I. Agricullture &
allied, of which: 43.9 7.1 19.8 43.0 4.4 53.7 -30.9
1. Raw Cotton 36.6 175.8 596.7 63.1 -71.7 35.0 -33.3
2. Unmfg. Tobacco 64.7 -22.8 10.2 28.7 69.0 84.8 21.2
3. Spices 21.6 -13.1 14.0 49.6 32.0 55.5 -26.6
4. Cereals na 2.8 -42.0 116.2 -10.5 65.8 -19.8
5. Oil Meals 22.6 18.4 55.7 66.2 10.4 141.3 -41.0
6. Marine Products -10.3 17.9 10.4 -2.7 -10.7 -9.2 -3.3
II. Ores and Minerals,
of which: 18.9 26.5 17.4 30.5 -14.6 27.2 -35.6
7. Iron Ore 24.6 31.9 16.0 49.0 -18.7 33.7 -32.8
III. Manufactured
goods, of which: 16.4 16.9 19.6 21.8 17.7 45.4 -24.9
8. Leather &
Manufactures 8.8 33.5 7.4 16.1 1.5 17.6 -24.2
9. Leather footwear na 1.6 18.1 20.5 6.0 20.5 -14.4
10. Gems &
Jewellery 17.2 -1.5 12.8 23.2 42.1 82.4 -21.7
11. Drugs,
Pharmaceuticals &
fine chemicals 69.8 15.7 27.4 28.5 15.0 26.2 -9.3
12. Cotton yarn, fabs,
made-ups, etc.
15.4 13.6 14.3 10.2 -11.5 4.2 -35.1
13. Readymade
Garments 12.0 17.0 30.6 8.9 12.9 14.3 -10.1
14. Handicrafts na 2.2 30.3 16.0 -40.8 -36.4 -43.6
15. Electronic Goods
na 57.5 18.5 19.1 104.2 139.9 -19.7
16. Manufactures of
metals na 31.3 24.6 38.8 7.1 31.3 -34.5
17. Machinery &
instruments na 37.7 30.6 35.8 19.9 41.0 -20.8
18. Transport
equipments na 30.5 52.8 41.9 58.8 86.5 -18.4
19. Primary & semi-
finished Iron & Steel na 20.8 -14.4 -5.1 14.0 69.8 -65.8
IV. Crude & Petroleum
Products (incl. Coal)
8.8 6212.4 66.2 53.6 -4.6 49.9 -44.0
V. Other & unclassified
items na 35.9 12.0 21.0 84.5 109.6 -31.3
Total Exports 20.8 21.0 23.4 29.0 13.6 48.1 -29.7

Source : GOI, Economic Survey 2009-10 , and earlier issues.


68

Table 1.5(A) : Direction of India's Imports by Regions (1995-2008)

(in US $ million)
CAGR (%) during
Group / Region 1995-96 2000-01 2005-06 2007-08 1996-01 2001-06 2006-08
1 2 3 4 5 6 7 8 9
I. OECD Countries 19209 (52.4 ) 20158 (39.9) 51797 (34.7) 87445 (34.8) 1.0 20.8 29.9
a. EU 10303 (28.1) 10510 (20.8) 25151 (16.8) 36810 (14.7) 0.4 19.1 21.0
b. North America 4243 (11.6) 3412 (6.8) 10375 (7.0) 22992 (9.1) -4.3 24.9 48.9
c. Asia & Oceania 3552 (9.7) 2984 (5.9) 9226 (6.2) 14496 (5.8) -3.4 25.3 25.3
d. Other OECD
Countries 1112 (3.0) 3251 (6.4) 7045 (4.7) 13147 (5.2) 23.9 16.7 36.6
II. OPEC 7644 (20.8) 2689 (5.3) 11171 (7.5) 76076 (30.2) -18.9 33.0 61.0
III. Eastern Europe 1674 (4.6) 850 (1.7) 3794 (2.6) 5264 (2.1) -12.7 34.9 17.8
IV. Developing Countries 8145 (22.2) 11156 (22.1) 37891 (25.4) 80648 (32.0) 6.5 27.7 45.9
a. Asia 6426 (17.5) 8460 (16.8) 30451 (20.4) 64142 (25.5) 5.7 29.2 45.1
(i) SAARC 257 (0.7) 466 (1.0) 1413 (0.9) 2111 (0.8) 12.6 24.8 22.2
(ii) Other Asian
developing countries 6169 (16.8) 7994 (15.8) 29037 (19.5) 62030 (24.7) 5.3 29.4 46.2
b. Africa 1132 (3.1) 1996 (3.9) 4742 (3.2) 10356 (4.1) 12.0 18.9 47.8
c. Latin America 587 (1.6) 701 (1.4) 2698 (1.8) 6151 (2.4) 3.6 30.9 51.0
V. Other / Unspecilfied
countries 3 (-) 15683 (31.0) 44514 (29.8) 2221 (0.9) ----- 23.2 -77.7
Grand Total 36675 (100) 50537 (100) 149166 (100) 251654 (100) 6.6 24.2 29.9

Note: Figures in parentheses indicate percentage share to column totals. Compound annual growth rate
(CAGR) has been worked out for specified periods.
Source : RBI (2009), Handbook of Statistics on Indian Economy 2008-09 , Mumbai.
69

Table 1.5(B): Direction of India's Imports by Regions and Countries (2007-10)

(in US $ million)
Share April-September
%
Region / Country 2007-08 2008-09 2008-09 % Share
Change 2008 2009
(%) Change 2009 (%)
1 2 3 4 5 6 7 8 9
I. Europe 51579 57262 11.0 18.9 35015 23712 -32.3 19.1
a. EU 38450 42733 11.1 14.1 24716 16805 -32.0 13.5
a.1 Germany 9885 12006 21.5 4.0 6325 4751 -24.9 3.8
a.2 UK 4954 5872 18.5 1.9 3360 2099 -37.5 1.7
II. Africa 14928 18904 26.6 6.2 11961 8657 -27.6 7.0
III. America 29606 30984 4.7 10.2 17796 11740 -34.0 9.5
a. North America 23048 21020 -8.8 6.9 11382 8328 -26.8 6.7
a.1 USA 21067 18561 -11.9 6.1 10197 7393 -27.5 6.0
b. Latin America 6557 9964 52.0 3.3 6414 3411 -46.8 2.7
IV. Asia and ASEAN 149949 188474 25.7 62.1 115879 76188 -34.3 61.3
a. East Asia 8356 11788 41.1 3.9 6857 5409 -21.1 4.4
b. ASEAN 22675 26203 15.6 8.6 14621 11857 -18.9 9.5
c. Wana 72015 90208 25.3 29.7 60034 33695 -43.9 27.1
d. North East Asia 44785 58456 30.5 19.2 33297 24443 -26.6 19.7
d.1 China P RP 27146 32497 19.7 10.7 18853 14907 -20.9 12.0
d.2 Japan 6326 7886 24.7 2.6 4448 3123 -29.8 2.5
e, South Asia - SAARC 2117 1818 -14.1 0.6 1070 783 -26.8 0.6
V CIS and Baltics 3788 6627 75.0 2.2 3681 2813 -23.6 2.3
VI. Unspecified Region 1805 1445 -20.0 0.5 663 1085 63.6 0.9
Total Imports 251654 303696 20.7 100.0 184996 124194 -32.9 100.0

Source: GOI, Economic Survey 2009-10 , pp. A90 - A94.


70

Table 1.5(C): Top 10 Countries of India's Imports: All Commodities - Value and Percentage Share (1998 - 2009)
(value in US $ million)
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
1 2 3 4 5 6 7 8 9 10 11 12
World 42379 49799 50056 51588 61533 78203 111472 149144 185081 249791 290667
China 1096 1288 1495 2043 2798 4056 7095 10866 17449 27116 31384
UAE 1721 2337 654 918 959 2061 4639 4353 8652 13477 20638
Saudi Arabia 1831 3021 619 466 506 738 1301 1632 13375 19411 19524
USA 3639 3568 2844 3160 4452 5038 6998 9453 11728 21030 18192
Iran 474 1253 212 285 259 267 410 702 7623 10921 12153
Germany 2140 1844 1752 2035 2409 2921 4014 6023 7541 9875 11713
Switzerland 2942 2603 3149 2881 2334 3315 5937 6555 9117 9834 11465
Kuwait 1501 1915 113 74 180 143 306 462 5988 7694 9408
Nigeria 1177 2932 63 87 78 76 48 72 7022 7620 8710
Korea Republic
(South) 1394 1275 891 1145 1525 2831 3507 4563 4803 6041 8605

(% share in total imports)


World 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
China 2.59 2.59 2.99 3.96 4.54 5.18 6.36 7.28 9.42 10.85 10.79
UAE 4.06 4.69 1.31 1.78 1.55 2.63 4.16 2.91 4.67 5.39 7.10
Saudi Arabia 4.32 6.07 1.24 0.90 0.82 0.94 1.16 1.09 7.22 7.77 6.71
USA 8.59 7.17 5.68 6.13 7.23 6.44 6.27 6.33 6.33 8.41 6.25
Iran 1.12 2.52 0.42 0.55 0.42 0.34 0.36 0.47 4.11 4.37 4.18
Germany 5.05 3.70 3.50 3.94 3.91 3.73 3.60 4.03 4.07 3.95 4.02
Switzerland 6.94 5.23 6.29 5.58 3.79 4.23 5.32 4.39 4.92 3.93 3.94
Kuwait 3.54 3.84 0.22 0.14 0.29 0.18 0.27 0.30 3.23 3.08 3.23
Nigeria 2.78 5.89 0.13 0.17 0.12 0.09 0.04 0.04 3.79 3.05 2.99
Korea Republic
(South) 3.29 2.56 1.78 2.22 2.47 3.62 3.14 3.05 2.59 2.41 2.96

Sources: CMIE, Foreign Trade and Balance of Payments, July 2005 and October 2009 Volumes, Mumbai.
71

Table 1.6(A): Direction of India's Exports by Regions (1995-2008)

(in US $ million)
CAGR (%) during
Group / Region 1995-96 2000-01 2005-06 2007-08
1996-01 2001-06 2006-08
1 2 3 4 5 6 7 8 9
I. OECD Countries 17705 (55.7) 23474 (52.7) 45837 (44.5) 62643 (38.4) 5.8 14.3 16.9
a. EU 8708 (27.4) 10411 (23.4) 22385 (21.7) 32861 (20.1) 3.6 16.5 21.2
b. North America 5826 (18.3) 9962 (22.3) 18375 (17.8) 21977 (13.5) 11.3 13.0 9.4
c. Asia & Oceania 2652 (8.3) 2264 (5.1) 3444 (3.4) 5162 (3.2) -3.1 8.8 22.4
d. Other OECD Countries 519 (1.6) 838 (1.9) 1633 (1.6) 2642 (1.6) 10.1 14.3 27.2
II. OPEC 3079 (9.7) 4850 (10.9) 15242 (14.8) 26671 (16.4) 9.5 25.7 32.3
III. Eastern Europe 1340 (4.2) 1318 (3.0) 1980 (1.9) 3384 (2.1) -0.3 8.5 30.7
IV. Developing Countries 9198 (28.9) 13013 (29.2) 39736 (38.5) 69572 (42.6) 7.2 25.0 32.3
a. Asia 7308 (23.0) 10038 (22.5) 30981 (30.0) 51477 (31.6) 6.6 25.3 28.9
(i) SAARC 1721 (5.4) 1929 (4.3) 5548 (5.4) 9617 (5.9) 2.3 23.5 31.7
(ii) Other Asian developing
countries 5587 (17.6) 8109 (18.2) 25434 (24.7) 41860 (25.7) 7.7 25.7 28.3
b. Africa 1513 (4.8) 1956 (4.4) 5699 (5.5) 12494 (7.7) 5.3 23.8 48.1
c. Latin America 378 (1.2) 1018 (2.3) 3056 (3.0) 5601 (3.4) 21.9 24.6 35.4
V. Other / Unspecilfied
countries 472 (1.5) 1906 (4.3) 295 (0.3) 863 (0.5) 32.2 -31.1 71.0
Grand Total 31795 (100) 44560 (100) 103091 (100) 163132 (100) 7.0 18.3 25.8

Note: Figures in parentheses indicate percentage share to column totals. Compound annual growth rate
(CAGR) has been worked out for specified periods.
Source : RBI (2009), Handbook of Statistics on Indian Economy 2008-09 , Mumbai.
72

Table 1.6(B): Direction of India's Exports by Regions and Countries (2007-10)

(in US $ million)
Share April-September
Region / Country 2007-08 2008-09 % Change 2008-09 Share
2008 2009 % Change
(%) 2009 (%)
1 2 3 4 5 6 7 8 9
I. Europe 37288 42076 12.5 22.7 23730 16406 -30.9 21.4
a. EU 34535 29351 13.9 2.2 22035 15345 -30.4 20.0
a.1 UK 6706 6650 -0.8 3.6 3676 2808 -23.6 3.7
a.2 Germany 5122 6389 24.7 3.4 3469 2343 -32.4 3.1
II. Africa 11540 11391 -1.3 6.1 6745 4912 -27.2 6.4
III. America 27671 28686 3.7 15.5 16358 11708 -28.4 15.3
a. North America 21998 22514 2.3 12.2 12491 9323 -25.4 12.2
a.1 USA 20731 21150 2.0 11.4 11766 8794 -25.3 11.5
b. Latin America 5673 6172 8.8 3.3 3867 2385 -38.3 3.1
IV. Asia and ASEAN 84338 96605 14.5 52.1 58183 42120 -27.6 55.0
a. East Asia 1413 1754 24.2 0.9 1013 780 -23.0 1.0
b. ASEAN 16414 19141 16.6 10.3 11568 8331 -28.0 10.9
c. Wana 30372 41694 37.3 22.5 26014 18668 -28.2 24.4
d. North East Asia 26502 25449 -4.0 13.7 14527 10821 -25.5 14.1
d.1 China P RP 10871 9354 -14.0 5.0 4998 3903 -21.9 5.1
d.2 Japan 3858 2026 -21.6 1.6 1680 1429 -15.0 1.9
e, South Asia - SAARC 9638 8567 -11.1 4.6 5061 3521 -30.4 4.6
V. CIS and Baltics 1740 1925 10.6 1.0 1154 693 -39.9 0.9
VI. Unspecified Region 555 4612 730.3 2.5 2736 749 -72.6 1.0
Total Exports 163132 185295 13.6 100.0 108907 76589 -29.7 100.0

Source: GOI, Economic Survey 2009-10 , pp. A95 - A99.


73

Table 1.6(C): Top 10 Countries of India's Exports: All Commodities - Value and Percentage Share (1998 - 2009)
(value in US $ million)
1998-99 1999-00 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 2008-09
1 2 3 4 5 6 7 8 9 10 11 12
World 33211 36760 44147 43976 52823 63886 83502 103075 126276 162988 182922
UAE 1867 2082 2586 2500 3334 5129 7345 8591 12024 15635 23959
USA 7198 8394 9252 8542 10917 11498 13760 17351 18853 20723 20852
China 427 539 830 955 1979 2957 5614 6758 8288 10834 9290
Singapore 517 670 862 976 1424 2126 3999 5424 6065 7371 8220
Hong Kong 1880 2494 2636 2374 2618 3264 3690 4471 4677 6308 6672
UK 1855 2034 2276 2168 2501 3025 3680 5059 5614 6702 6605
Germany 1852 1735 1887 1794 2111 2546 2825 3586 3977 5119 6354
Netherlands 763 886 876 867 1050 1290 1604 2474 2668 5228 6290
Saudi Arabia 774 743 810 829 943 1124 1411 1810 2586 3708 4996
Belgium 1288 1340 1456 1395 1665 1807 2509 2871 3472 4211 4422

(% share in total exports)


World 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
UAE 5.62 5.66 5.86 5.69 6.31 8.02 8.79 8.33 9.52 9.59 13.09
USA 21.67 22.83 20.96 19.43 20.66 17.99 16.47 16.83 14.93 12.71 11.39
China 1.29 1.47 1.88 2.17 3.74 4.62 6.72 6.55 6.56 6.64 5.07
Singapore 1.56 1.82 1.95 2.22 2.69 3.32 4.78 5.26 4.80 4.52 4.49
Hong Kong 5.66 6.78 5.97 5.40 4.95 5.10 4.41 4.33 3.70 3.87 3.64
UK 5.59 5.53 5.15 4.93 4.73 4.73 4.40 4.90 4.44 4.11 3.61
Germany 5.58 4.72 4.28 4.08 3.99 3.98 3.38 3.47 3.14 3.14 3.47
Netherlands 2.30 2.41 1.98 1.97 1.98 2.01 1.92 2.40 2.11 3.20 3.43
Saudi Arabia 2.33 2.02 1.83 1.89 1.78 1.75 1.69 1.75 2.04 2.27 2.73
Belgium 3.88 3.65 3.30 3.17 3.15 2.82 3.00 2.78 2.74 2.58 2.41

Source: CMIE, Foreign Trade and Balance of Payments, July 2005 and October 2009 Volumes, Mumbai.
74

Table 1.7: Export growth and share in world exports: India and other select countries (2000-09)

Value (US $ Growth rate % Change in


Share in world exports (%)
billion) CAGR Annual shares (%)

2009 2009
2008 2000-06 2007 2008 2000 2007 2008 2008/2000
(Jan-Jun) (Jan-Jun)
1 2 3 4 5 6 7 8 9 10 11
China 1429 25.4 25.6 17.3 -21.7 3.9 8.8 8.9 9.1 5.0
Hong Kong 363 7.8 8.7 5.3 -16.7 3.2 2.5 2.3 2.5 -0.9
Malaysia 210 8.5 9.6 19.1 -31.2 1.5 1.3 1.3 1.2 -0.2
Indonesia 148 7.9 14.7 24.4 -28.3 1.0 0.9 0.9 0.9 -0.1
Thailand 173 11.3 17.0 12.9 -23.4 1.1 1.1 1.1 1.2 0.0
Singapore 338 12.0 10.1 13.0 -31.7 2.2 2.2 2.1 2.1 -0.1
India 177 19.1 21.4 20.4 -18.4 0.7 1.1 1.1 1.2 0.4
Brazil 198 16.5 16.6 23.2 -22.8 0.9 1.2 1.2 1.2 0.4
Mexico 292 7.1 8.6 7.3 -30.3 2.6 2.0 1.8 1.8 -0.8
Russia 472 19.3 16.6 33.1 -46.8 1.7 2.6 2.9 2.2 1.3
Korea 422 11.2 14.1 13.6 -22.7 2.7 2.7 2.6 2.9 -0.1
Emerging & Developing
Economies 6218 17.3 15.2 25.7 -27.6 25.9 35.9 38.9 38.4 12.9
World 16001 11.2 14.1 16.2 -29.5 100 100 100 100 -----

Source: Computed from International Financial Statistics, IMF, November 2009; obtained from GOI,
Economic Survey 2009-10 , p.155.
75

Table 1.8: Share in India's trade and export-import ratio with major trading partners (2004-10)

Share in India's total trade (%) Export / Import ratioa


Partner
Sl.No. 2008-09 2009-10 2008-09 2009-10
Country 2004-05 2007-08 2008-09 2004-05 2007-08 2008-09
(Apr-Sep) (Apr-Sep) (Apr-Sep) (Apr-Sep)
1 2 3 4 5 6 7 8 9 10 11
1 UAE 6.1 7.0 9.8 8.7 9.2 1.6 1.2 1.0 1.5 1.5
2 China 6.5 9.2 8.6 7.4 9.4 0.8 0.4 0.3 0.3 0.3
3 USA 10.6 10.1 8.2 6.9 8.1 2.0 1.0 1.1 1.4 1.2
4 Saudi Arabia 1.4 5.6 5.1 5.6 4.4 1.1 0.2 0.3 0.3 0.3
5 Germany 3.5 3.6 3.8 3.1 3.5 0.7 0.5 0.5 0.6 0.5
6 Singapore 3.4 3.7 3.3 3.3 3.2 1.5 0.9 1.1 1.4 1.1
7 Iran 0.8 3.1 3.0 3.2 3.3 3.0 0.2 0.2 0.2 0.2
8 Hong Kong 2.8 2.2 2.7 1.8 2.5 2.1 2.3 1.0 2.8 2.1
9 Korea RP 2.3 2.1 2.6 2.2 1.9 0.3 0.5 0.5 0.5 0.0
10 UK 3.7 2.8 2.6 2.2 2.4 1.0 1.4 1.1 1.3 1.3
11 Australia 2.3 2.2 2.6 2.5 2.9 0.2 0.1 0.1 0.1 0.1
12 Switzerland 3.3 2.5 2.5 3.1 2.8 0.1 0.1 0.1 0.0 0.0
13 Japan 2.7 2.5 2.2 2.0 2.3 0.7 0.6 0.4 0.4 0.5
14 Malaysia 1.7 2.1 2.2 1.9 1.9 0.5 0.4 0.5 0.4 0.7
15 Nigeria 0.4 2.1 2.1 2.3 1.9 13.3 0.1 0.2 0.1 0.2
16 Total ( 1 to 15) 51.8 60.7 61.3 56.3 59.6 1.0 0.6 0.5 0.6 0.6
Total trade 100.0 100.0 100.0 100.0 100.0 0.7 0.6 0.6 0.6 0.6
a
A coefficient of export and import ratio between 0 and 1 implies that India's imports are greater than exports, and a
coefficient greater than one implies that India exports more than what it imports.

Source: Computed from DGCI&S data, obtained from GOI, Economic Survey 2009-10, p.163.
76

Table 1.9: State-wise exports of top 15 States (2007-10)

(US $ million)
(April-September) Growth rate (%)
Share (%)
State 2007-08 2008-09 2009-10
2008-09 2009-10 2008-09 2008-09
(Apr-Sept)
1 2 3 4 5 6 7 8
Maharashtra 44841 44667 25612 20180 24.1 -0.4 -21.2
Gujarat 34736 40272 26802 16433 21.7 15.9 -38.7
Tamil Nadu 14816 18540 10654 7770 10.0 25.1 -27.1
Karnataka 14641 12296 7877 4181 6.6 -16.0 -46.9
Andhra Pradesh 7427 9897 5231 4585 5.3 33.3 -12.3
Delhi 5183 8467 4936 2214 4.6 63.4 -55.2
Uttar Pradesh 4295 7571 5284 2586 4.1 76.3 -51.1
West Bengal 5679 5583 3554 1808 3.0 -1.7 -49.1
Haryana 4414 4792 2478 2481 2.6 8.6 0.1
Kerala 2364 4753 2544 2778 2.6 101.0 9.2
Orissa 3024 3351 2189 1220 1.8 10.8 -44.3
Rajasthan 3276 3313 1815 1365 1.8 1.1 -24.8
Punjab 2598 3016 1628 1175 1.6 16.1 -27.9
Madhya Pradesh 2915 2946 1596 904 1.6 1.1 -43.4
Goa 1387 1781 640 554 1.0 28.4 -13.5
India's total exports 163132 185295 108907 76589 100.0 13.6 -29.7

Source: DGCI&S, obtained from GOI, Economic Survey 2009-10 , p.171