INDIA’S INTERNATIONAL TRADE AND INVESTMENT

AN OVERVIEW
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India’s International Trade

Towards Increased Global Integration through Trade

‰ India’s Merchandise Trade Turnover

Exports Imports Total
CAGR: 24.5% 30.3% 27.8% increased from US$95 bn in FY02 to
(2002-08) US$ 391 bn in FY08 (CAGR of 27.8%)
414

‰ India’s Exports increased from US$44

312 bn in FY02 to US$ 163 bn in FY08

252 (CAGR of 24.5%)

195
251 ‰ India’s Imports increased from US$
142 186 51 bn to US$ 251 bn (CAGR of 30.3%)
114 149
95 112
61 78 ‰ Share in world merchandise exports
51 163
126
64 84 103 in 2007 – 1.04%; Rank – 26th
44 53

FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY 2008

Source: Ministry of Commerce & Industry.

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India’s Export: Shifting Southwards

India’s Export Market FY 2001 (US$44 bn) India’s Export Market FY 2008 (US$163 bn)

%
4.1
a
Asia
Af
ri c Africa
38.7% 7.1%
North Asia
America 51.7% North
22.4% America
13.5%
LA
C
LAC 3.
Europe 5%
2.2% Europe
CIS & Baltics 25.9% CIS & 22.9%
2.3% Others Baltics Others
4.3% 1.1% 0.3%

‰ Direction of exports moving towards the Southern countries, particularly Asia.

‰ Share of Asia increased from 39% to 52% during 2001 – 2008.
‰ Future trade flows to be geared towards the developing nations (buttressed by GOI policies).
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India’s Major Trading Partners

Top Export Markets (FY 2008, US$ bn) Top Import Sources (FY 2008, US$ bn)

USA China 27.1

20.7

UAE 15.6 USA 21.0

China 10.8 Saudi Arabia 19.4

Singapore 7.4 UAE 13.5

UK 6.7 Iran 10.9

HK 6.3 Germany 9.9

Netherlands 5.2 Switzerland 9.8
Germany 5.1 Singapore 8.1
Belgium 4.2 Australia 7.8

Italy 3.9 Kuwait

Total Exports: US$ 163 bn 7.7 Total Imports: US$ 251 bn

Source: Ministry of Commerce & Industry.

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India’s Trade Basket

Top Export Items (FY 2008, US$ bn) Top Import Items (FY 2008, US$ bn)

Petroleum Crude & Prod

79.6
Petroleum Prod 28.4

Electronic Goods 20.7

Gems & Jewellery 19.7

Transport equip 20.1

Machinery & Instr 9.1

Pharma & Fine Chem 7.6 Machin. excpt electrcl, electonic 19.9

RMG Cotton 7.5 Gold 16.7

Manuf. of metals 7.1 Iron & Steel 8.2

Tranport equip 7.0 8.0

Prls. Prec/Semi Prec Stones

Iron ore 5.8 7.9

Metalifer. ores & metal scrp

Cot. yarn & Fabrics 4.7 7.2

Organic chem

Prim & Semi-fin. Iron & Steel 4.2 6.4

Coal, Coke & Briquittes

Source: Ministry of Commerce & Industry.

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India’s Trade in Services

Total Trade in Services (US$ bn) …of which Software Exports

Exports Imports Total 40.3

CAGR: 31.3% 24.0% 28.2%
(2002-08) 31.3
.1%
2
138
R :3
G 23.6
121 C A

92 17.7

50
12.9
71 44
9.9
35 7.7
44
38 28
31 88
17 76
14 17 58
27 43
17 21

FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY 2008 FY2002 FY2003 FY2004 FY2005 FY2006 FY2007 FY2008

Source: RBI. Source: NASSCOM.

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India’s Direct Investment Flows

Both foreign direct investment inflows & outflows Sectoral pattern of approved Indian OFDI
have shown an increasing trend (US$ mn) (April-June 2008)
FDI Inflows

32435
FDI Outflows

Manufactu-
Others
ring
32.3%
22079 36.9%

18369
13107

10073
Trading Non-
8961

15.3% Financial
6130

6051

Services
5043
5035
4029

4322

12.3% Financial
Services
1892

1770

1797
1490

1495
829

3.2%

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

* Apr-Jun
Source: RBI Bulletin, October 2008; Online Database on Indian Economy; Exim Bank Analysis.
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India’s Overseas Investment

Approved ODI across countries
Total : US$ 3.2 bn (Apr– June 2008) ‰ Destinational analysis of Indian
Saudi approved ODI stock reveals that
Arabia
Mauritius regional distribution is evenly
USA 2.5%
9.0%
11.2% Canada
UAE spread out across various
8.7% 2.1%
Netherlands countries.
Malaysia
22.9%
2.0%
‰ Singapore, Netherlands and the
British
Virgin US were the largest destinations
Others Island
Singapore 6.1% 1.6%
for Indian approved ODI
32.5% accounting for 2/3rd of the total,
Switzerland
1.4% followed by Mauritius and UAE.

Source: RBI Bulletin, October 2008.

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