indian foreign trade

8/3/2019 Indian Foreign Trade

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Indian ForeignTrade

Its Composition,, Destination,,and Origin-A trend analysis

Presented by:

•Tanzeela Shah

•Sreejith Viswam

•Manish Roychoudhury

•Manish Rajput



What is Foreign Trade???

► Each country tries to increase the availability of goods and services to its people through purchasefrom other countries.

► Similarly, it tries to sell its surplus production toother countries.

►Buying of goods from other countries is calledimport and selling of goods to other countries is

called export.► And both import and export together constitute

Foreign Trade of a country…



Who are engaged in foreign trade???

►In India, government as well as privatesector participates in foreign trade.

►In India before independence, foreign tradewas mainly carried by private sector.

►However after independence, governmentof India set up number of organizations toengage in foreign trade.



Government Organizations

►The government organizations mainly carryout foreign trade in bulk items like foodgrains, iron ore, minerals and metals.

►Examples of government agencies engagedin foreign trade are STC (State TradingCorporation) MMTC (Mineral and Metal

Trading Corporation) etc



Private Sector

►Some of the important items exported bythis sector are readymade garments, gemsand jewellery, handicrafts, tea and coffee

etc

►Some of the items imported by privatesector are consumer goods, capital goods

etc.



Origin

►Over last 60 years Indian Foreign Trade hasundergone a complete change in terms of composition and directions.

►Before 1991, foreign trade of India sufferedfrom bureaucratic and discretionarycontrols.

►Foreign exchange reserves were tightlycontrolled by Govt. and the RBI.



Composition of Foreign Trade

►Composition of foreign trade means thatgoods we are importing and the goods weare exporting.

►Therefore composition of foreign tradeconsists of composition of exports as well ascomposition of imports.

►We usually import following commodities:-



►Food and allied products

This commodity includes cereals, pulses,cashew nuts, edible oils etc.

►Fuel

Coal and POL (Petroleum, Oil andLubricants) are the important sources of energy. After independence with thegrowth of industries the demand for thesame has increased. As our domesticproduction is not sufficient so Indiaimports petroleum goods in largequantities.



►Fertilizers

It is the important input of agricultural andour domestic production of fertilizers fallsshort of our requirement hence we need

to import the same.►Paper board, manufactures and

newsprint

Sometimes we fall short of the above sowe have to import it from other countries.



►Capital GoodsIt includes machinery, transport equipments,

electronic goods etc. With the growingrequirements of India’s rapidly developingeconomy, import of capital goods continue tohave a very high share of our total imports.

►

Other bulk itemsThis commodity group includes things likechemicals, Iron and steel, pearls, preciousstones etc

►Unclassified itemsOther items which where not classified abovecomes into this category.

C f I d ’ I



Composition of India’s Imports Commodity Group Years (Percentage Share)

Food and allied products 2.3 2.1 3.5

Fuel (POL) 34.2 33.4 33.2

Fertilizers 2.0 4.3 2.5

Capital goods 18.7 15.5 14.3

Others-Chemicals

-Gold & Silver

-Pearls, precious stones

-Electronic Goods

38.94.9

7.1

3.2

8.2

40.05.0

7.2

5.5

7.7

43.45.8

9.3

4.4

8.6

100 100 100

2007-08 2008-09 2009-10

TOTAL



Composition of Exports

►Composition of exports means the goodswe are selling to other countries.

►

It includes the following commodities► Agricultural and allied products

It includes tea, coffee, cereals, spices,tobacco, oil meals, vegetables, marine

products and raw cotton. etc



►Ores and minerals

This commodity includes iron ore,processed minerals, and other ores andminerals like mica etc.

►Manufactured Goods

This group includes leather and leatherproducts, gems and jewellery, machineand transport equipments, electronic

goods, drugs, pharmaceuticals, cottonyarns and fabrics, ready made garmentsand handicrafts etc.



►Crude and petroleum products

This commodity group at one time wasimportant part of India’s exports. Howeversetting up of our own oil refineries, theirexport is very significant.

►Other and unclassified items

Items which have not been included in the

above categories come in this list.



Composition of India’s Export Commodity Group Year (Percentage Share)

Agricultural & alliedproducts

9.9 9.1 9.0

Ores & minerals 5.5 4.2 3.7

Manufactured goods

-Gems & Jewellery

-Cotton yarn, Fabric madeups

-Readymade garments

-Handicraft

64.1 66.7 69.2

Crude & Petroleum 17.8 14.9 14.2

Others & Unclassifieditems

2.7 5.1 3.9

TOTAL 100 100 100

2007-08 2009-102008-09



Direction of Foreign Trade

►

Direction of foreign trade means thecountries to which India exports its goodsand the countries from which it imports.

►Thus directions consists of destination of our exports and sources of our import.

►USA has emerged as our most importanttrading partner followed by Germany, Japanand UK.



Direction of Imports

►Direction of imports means countries fromwhich we import goods. Beforeindependence most of our imports were

from Britain. After independence we areimporting goods from other countries suchas USA, Japan, Germany, France. etc

Di ti f I di ’ I t



Direction of India’s Imports Country Year (Percentage Share)

UK 14 14.9 14.4

Germany 8 7.1 7

Other EU 8 10 12

USA 23.3 24 24.6

Japan 11.5 9.9 10.7

Russia 9.3 9 9.5

Other East Europe 7.4 7.1 7.5

OPEC 3 2 3.3

Other LDC’S 5.5 5.6 5.8

Others 10 10.4 10.2

2007-08 2008-09 2009-10



Direction of India’s Exports

►Before independence, Britain had largestshare of our exports. After independence,share of Britain in our total exports declined

as USA emerged as the largest single buyerof our goods.

Di ti f I di ’ E t



Direction of India’s Exports Countries Year (Percentage Share)

UK 23 20.2 19.9

Germany 7 7.1 6.9

Other EU 5 5.6 5.5

USA 27 28.3 28.9

Japan 10.2 10 9.2

Russia 8.8 8.7 8.7

Other East Europe 4.2 4 4.2

OPEC 3.8 3.3 3.5

Other LDC 2.5 1.9 2.2

Others 2.5 2.9 2.3

2007-08 2008-09 2009-10



Questions????

indian foreign trade

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