World Trade Scenario : As per IMF’s World Economic Outlook October, 2011, world trade recorded its largest ever annual increase in 2010, as merchandise exports surged 14.4 per cent. The volume of world trade (goods and services) in 2011 is expected to slow down to 7.5 per cent compared to the 12.8 per cent achieved in 2010. Growth in the volume of world trade is expected to decline in 2012 to 5.8 per cent as per IMF projections.
The IMF has moderated its growth projections of world output to 4 per cent in 2012. The advanced economies are expected to grow at 1.9 per cent in 2012 while the emerging and developing economies to grow at 6.1 per cent. The projected growth rates in different countries are expected to determine the markets for our exports.
As per WTO’s International Trade Statistics, 2010, in merchandise trade, India is the 20th largest exporter in the world with a share of 1.4 per cent and the 13th largest importer with a share of 2.1 per cent in 2010.
The year 2011 has been a difficult year with Japan facing a major earthquake and tsunami, the swelling of unrest in the Middle East oil producing countries, the slowing down of US economy and the Euro area facing major financial turbulence. The current global economic slowdown has its epicenter in the Euro-region but the contagion is being witnessed in all major economies of the world. As a result, India’s short-term growth prospects have also been impacted.
Exports: Exports recorded a growth of 40.49 percent during April-March 2010-11. The government has set an export target of US $ 300 billion for 2011-12. With merchandise exports reaching US $ 217.66 billion in 2011-12 (Apr-Dec), the export target of 300 US $ billion is expected to be achieved. Export target and achievement from 2004-05 to 2010-11 and 2011-12 (Apr-Dec) is given in the Table 1.
Imports: Cumulative value of imports during 2011-12 (Apr-Dec) was the US $ 350.94 billion as against US $ 269.18 billion during the corresponding period of the previous year registering a growth of 30.4 percent in $ terms. Oil imports were valued at US $ 105.6 billion during 2011-12 (Apr-Dec) which was 40.39 percent higher than oil imports valued the US $ 75.2 billion in the corresponding period of the previous year. Non-oil imports were valued at the US $ 245.35 billion during 2011-12 (Apr-Dec) which was 26.49 percent higher than non-oil imports of US $ 194.0 billion in the previous year.
Table 1. Export-import balance:
Trade Balance: The trade deficit in 2011-12 (Apr-Dec) was estimated at US$133.27 billion which was higher than the deficit of US $96.21 billion during 2010-11 (Apr-Dec). Performance of exports, imports and balance of trade during 2004-05 to 2011-12 (April-Dec) is given in the table below:
India’s Foreign Trade
Strategy for Doubling Exports: Global economic outlook is a major determinant of export performance of any country. Export growth cannot, therefore, be viewed in isolation from economic outlook in the world economy. Keeping in view the urgency of managing the growing trade deficit and uncertain global economic scenario, Department of Commerce in May 2011 finalized a Strategy Paper for doubling merchandise exports in three years from the US $ 246.00 billion in 2010-11 to the US $ 500 billion in 2013-14. Exports were envisaged to increase at a compounded average growth of 26.7% per annum.
Exports by Principal Commodities : Disaggregated data on exports by principal commodities, both in rupee and dollar terms, available for the period 2011-12 (April-October) as compared with the corresponding period of the previous year are given in Table 1, and 2 respectively. Exports of the top five commodities during the period 2011-12 (April-October) registered a share of 53.1 per cent mainly due to significant contribution in the exports of petroleum (crude & products), gems and jewellery, transport equipments, machinery and instruments, drugs, pharmaceuticals and fine chemicals.
The share of top five principal commodity groups in India’s total exports during 2011-12 (AprilOctober) is given below:
Table 4. Top Five Countries of Export
(Value in Crore)
|2.||United Arab Emirates||1,97,832.08||1,84,778.7||-6.6||9.7|
Plantation Crops : Export of plantation crops during 2011-12(April-October), increased by 39.29 per cent in US $ terms compared with the corresponding period of the previous year. Export of coffee registered a growth of 77.50 per cent, the value increasing from US $ 313.53 million to US $ 556.52 million. Export of tea also increased by 9.34 per cent.
Agriculture and Allied Products: Agriculture and allied products as a group include cereals, pulses, tobacco, spices, nuts and seeds, oil meals, guar gum meals, castor oil, shellac, sugar and molasses, processed food, meat, and meat products, etc. During 2011-12 (April-October), exports of commodities under this group registered a growth of 62.90 percent with the value of exports increased from US$ 8165.03 million in the previous year to the US $ 13300.63 million during the current year.
Ores and Minerals : Exports of ores and minerals were estimated at US $ 4700.29 million during 2011-12 (April-October) registering a negative growth of 8.32 per cent over the same period of the previous year. Sub groups viz. processed minerals and iron ore has recorded a negative growth of 17.22 per cent and 23.29 per cent. Coal registered a growth of 35.76 per cent and other ores & minerals 78.37 per cent respectively. Mica has registered a growth of 5.74 per cent.
Leather and Leather Manufactures : Export of leather and leather manufactures recorded a growth of 27.64 per cent during 2011-12 (April-October). The value of exports increased to US $ 2704.51 million from US $ 2118.86 million during the same period of the previous year. Exports of leather and manufactures have registered a growth of 30.19 per cent and leather footwear also registered a growth of 24.55 per cent.
Gems and Jewellery : The export of gems and jewellery during 2011-12 (April-October) increased to US $ 27664.09 million from US $ 16770.33 million during the corresponding period of last year showing a growth of 64.96 per cent.
Chemicals and Related Products : During the period 2011-12 (April-October), the value of exports of chemicals and allied products increased to US $ 21977.24 million from US $ 16276.94 million during the same period of the previous year registering a growth of 35.02 per cent. Rubber,
glass & other products, residual chemicals & allied products, basic chemicals, pharmaceuticals & cosmetics and plastic & linoleum have also registered a positive growth.
Engineering Goods : Items under this group consist of machinery, iron & steel and other engineering items. Export from this sector during the period 2011-12(April-October) stood at US $36694.23 million compared with US $ 27098.96 million during the same period of the previous vear, registering a growth of 35.41 per cent. The growth in export of iron & steel bar rod stood at 51.86 per cent, transport equipments 39.38 per cent, primary & semi-finished iron & steel 23.20 per cent, non-ferrous metals 13.59 per cent, and machine tools at 10.99 per cent.
Electronic Goods: During the period 2011-12 (April-October), exports of electronic goods as a group was estimated at the US $ 5024.92 million compared with the US $ 4299.36 million during the corresponding period of last year, registering a growth of 16.88 percent.
Textiles: During the period 2011-12 (April-October), the value of textiles exports was estimated at the US $ 15101.96 million compared with the US $ 11987.38 million in the corresponding period of the previous year, recording a growth of 25.98 percent. The export of readymade garments registered a growth of 28.60 percent, cotton yarn/fabrics/made-ups, etc. registered a growth of 23.06 per cent, wool and woolen manufactures 54.21 percent, coir and coir manufactures 38.85 percent, manmade textiles & made-ups has shown a growth of 30.25 percent, natural silk textiles and jute manufactures registered a negative growth of 35.15 percent and 4.67 percent respectively.
Handicrafts and Carpets: Exports of handicrafts declined to the US $ 101.67 million during 201112 (April- October), from the US $ 128.24 million during the corresponding period of the previous year registering a negative growth of 20.72 percent. Export of carpets decreased to the US $ 439.66 million from the US $ 536.98 million during the same period last year registering a negative growth of 18.12 percent.