A STUDY EMERGING TRENDS OF FOREIGN TRADE AND E-COMMERCE IN

INDIA

Immanial Yamarthi
Swiss School of Business and Management, Geneva
GBC - Geneva Business Center
Avenue des Morgines 12
1213 Genève
Switzerland
www.ssbm.ch
Email:immanial@ssbm.ch / immasapsd@gmail.com
Tel.8019507636

1. The history of foreign trade and e-commerce in India

The history of foreign trade and e-commerce in India dates back several centuries to the time of
the Indian Ocean trade network, which connected India to the rest of the world through the
exchange of goods, services, and ideas. However, the modern history of foreign trade and e-
commerce in India can be traced back to the 1990s, when the Indian government began to
liberalize and deregulate its economy and encourage foreign investment.
During the 1990s and early 2000s, foreign trade and e-commerce in India grew rapidly, driven by
the liberalization of trade policies, the expansion of the domestic market, and the increasing use
of technology. The first e-commerce websites appeared in India in the late 1990s, and the number
of online shoppers continued to grow steadily over the next few years. In the late 2000s, the rise
of mobile technology and the increasing availability of affordable internet access helped to
further drive the growth of e-commerce in India.
In recent years, the growth of foreign trade and e-commerce in India has accelerated, driven by
the rapid growth of the middle class, increasing consumer confidence, and the adoption of digital
technologies by businesses and consumers. India is now one of the fastest-growing e-commerce
markets in the world, with a rapidly expanding customer base and a rapidly growing number of
online retailers.
Despite its rapid growth, the foreign trade and e-commerce industries in India still face many
challenges, such as a lack of clear regulatory framework, inadequate infrastructure, and a lack of
consumer trust in online shopping. However, the Indian government and private sector are
working together to address these challenges and further develop the country's foreign trade and
e-commerce industries.
2. Volume and value of exports and imports in India
India is one of the world's largest and most rapidly growing economies, and its foreign trade
plays an important role in its overall economic growth. In recent years, the volume and value of
exports and imports in India have grown significantly, driven by a combination of factors such as
increasing consumer demand, favorable economic policies, and the growth of e-commerce.
As of 2021, the value of exports from India was estimated to be around US$ 330 billion, while
the value of imports was estimated to be around US$ 560 billion. The top exports from India
include petroleum products, pharmaceuticals, textiles, and engineering goods, while the top
imports include crude oil, gold, coal, and electronic goods.
The growth of e-commerce has also had a significant impact on the volume and value of exports
and imports in India, particularly in terms of cross-border e-commerce. In recent years, the
number of cross-border e-commerce transactions in India has grown rapidly, driven by the
increasing availability of affordable internet access and the growing number of consumers
shopping online. This has helped to increase the volume and value of exports and imports, and
has also created new opportunities for businesses to reach new customers and expand into new
markets.

3.Major trading partners of India

India has a diverse and rapidly growing foreign trade, and it engages in trade with countries
all over the world. Some of India's major trading partners include:
1. China: China is one of India's largest trading partners, with bilateral trade between the
two countries estimated to be worth over US$ 100 billion in 2021.
2. United States: The United States is another important trading partner for India, with
bilateral trade estimated to be worth over US$ 70 billion in 2021.
3. United Arab Emirates: The UAE is a significant trading partner for India, particularly in
the areas of petroleum and petroleum products, gold, and diamonds.
4. Singapore: Singapore is a key trading partner for India, particularly in the areas of
pharmaceuticals, electronics, and engineering goods.
5. Japan: Japan is an important trading partner for India, with bilateral trade estimated to be
worth over US$ 20 billion in 2021.
6. South Korea: South Korea is a growing trading partner for India, particularly in the areas
of electronics, automobiles, and steel products.
7. Hong Kong: Hong Kong is an important hub for India's trade with the rest of Asia, and it
is a significant trading partner for India in its own right, particularly in the areas of
pharmaceuticals, textiles, and precious stones.
These are just a few of India's major trading partners, and the country's foreign trade is
constantly evolving and growing. In recent years, India has been working to further
strengthen its trade relationships with other countries, particularly in Asia and the Middle
East, and to expand its exports and imports with these countries.
4.Online marketplace and e-commerce platform usage
In India, online marketplaces and e-commerce platforms have become increasingly popular in
recent years, driven by the growing number of consumers shopping online, the increasing
availability of affordable internet access, and the rise of mobile technology.
Some of the most popular online marketplaces and e-commerce platforms in India include:
1. Flipkart: Flipkart is one of the largest e-commerce platforms in India, offering a wide
range of products, including electronics, fashion, home goods, and more.
2. Amazon India: Amazon is another major player in the Indian e-commerce market,
offering a wide range of products and services, including Amazon Prime, Amazon Pay,
and more.
3. Paytm Mall: Paytm Mall is a leading e-commerce platform in India, offering a wide range
of products and services, including online shopping, mobile recharge, and more.
4. Snapdeal: Snapdeal is another popular online marketplace in India, offering a wide range
of products and services, including electronics, fashion, home goods, and more.
5. Myntra: Myntra is a leading online marketplace for fashion and lifestyle products in
India, offering a wide range of products, including clothing, footwear, and accessories.
These are just a few of the many online marketplaces and e-commerce platforms that are popular
in India, and the number of platforms and users is constantly growing. In recent years, e-
commerce has become an increasingly important part of the Indian economy, and it is expected
to continue to grow rapidly in the coming years.
5.Types of products and services being traded
In India, a wide range of products and services are being traded both domestically and
internationally, reflecting the diversity and complexity of the country's economy. Some of the
most common products and services being traded in India include:
1. Agricultural products: India is one of the largest agricultural producers in the world, and
agricultural products such as rice, wheat, sugar, and cotton are major exports.
2. Petroleum products: India is one of the largest consumers of petroleum in the world, and
petroleum products such as crude oil and petroleum products are major imports.
3. Pharmaceuticals: India is a major producer of pharmaceuticals, and pharmaceutical
products such as drugs and medicines are major exports.
4. Textiles: India is one of the largest producers of textiles in the world, and textiles such as
cotton, silk, and wool are major exports.
 5. Engineering goods: India is a major producer of engineering goods, such as machinery,
equipment, and parts, and these goods are major exports.
6. Consumer goods: India is a major market for consumer goods, including electronics,
fashion, and home goods, and these goods are major imports.
7. Services: India is also a major exporter of services, including information technology,
business process outsourcing, and tourism services.
These are just a few examples of the many types of products and services being traded in India,
and the country's trade is constantly evolving and growing. In recent years, India has been
working to expand its exports and imports in a number of areas, particularly in the areas of high-
tech goods and services, and the future looks promising for continued growth in these areas.
6. Adoption of e-commerce by Indian businesses
The adoption of e-commerce by Indian businesses has increased rapidly in recent years, driven
by the growing number of consumers shopping online and the increasing availability of
affordable internet access. Many Indian businesses, both large and small, have recognized the
potential benefits of e-commerce, including increased reach, improved customer engagement,
and reduced costs.
Some of the key factors driving the adoption of e-commerce by Indian businesses include:
1. Growing consumer demand: With more and more consumers shopping online, Indian
businesses have seen the importance of having a presence on e-commerce platforms in
order to reach and engage with these customers.
2. Improved technology: The widespread availability of affordable internet access and the
rise of mobile technology have made it easier for businesses to launch and manage online
stores and to reach customers through e-commerce platforms.
3. Government support: The Indian government has been actively promoting the adoption
of e-commerce by Indian businesses, including through the launch of initiatives such as
the "Digital India" program.
4. Increased competition: As more businesses launch online stores and start selling through
e-commerce platforms, the competition for customers has increased, encouraging more
businesses to adopt e-commerce in order to remain competitive.
Overall, the adoption of e-commerce by Indian businesses has been growing rapidly, and it is
expected to continue to grow in the coming years as more and more businesses recognize the
benefits of e-commerce and launch online stores.
7.Impact of trade agreements on foreign trade and e-commerce
Trade agreements can have a significant impact on both foreign trade and e-commerce, affecting
the flow of goods and services between countries and shaping the regulatory environment for e-
commerce businesses. Some of the key ways trade agreements can impact foreign trade and e-
commerce include:
1. Tariff reductions: Trade agreements can reduce or eliminate tariffs on goods traded
between countries, making it easier and less expensive for businesses to engage in cross-
border trade.
2. Harmonization of regulations: Trade agreements can encourage the harmonization of
regulations between countries, making it easier for e-commerce businesses to operate
across borders and reach new customers.
3. Improved market access: Trade agreements can open up new markets for businesses,
providing access to new customers and helping to spur growth in both domestic and
foreign trade.
4. Protection of intellectual property: Trade agreements can provide stronger protections for
intellectual property, helping to ensure that e-commerce businesses are able to protect
their products and services and maintain a competitive advantage.
Overall, trade agreements can have a significant impact on both foreign trade and e-commerce,
shaping the regulatory environment and affecting the flow of goods and services between
countries. As such, they are an important consideration for businesses looking to engage in cross-
border trade and to grow their e-commerce operations.
8.Impact of india trade agreements on foreign trade and e-commerce
India has signed a number of trade agreements that have had an impact on its foreign trade and e-
commerce sector. Some of the key trade agreements and their impact on foreign trade and e-
commerce in India include:
1. India-ASEAN Free Trade Agreement (AFTA): This agreement, signed in 2003,
eliminated tariffs on goods traded between India and the 10 ASEAN countries, helping to
spur growth in bilateral trade between the two regions.
2. India-South Asia Free Trade Agreement (SAFTA): This agreement, signed in 2004,
reduced tariffs on goods traded between India and its South Asian neighbors, helping to
improve market access and increase cross-border trade.
3. India-Japan Comprehensive Economic Partnership Agreement (CEPA): This agreement,
signed in 2011, reduced tariffs on goods traded between India and Japan, improving
market access for Indian businesses and making it easier for Japanese companies to sell
their products in India.
4. India-Australia Comprehensive Economic Cooperation Agreement (CECA): This
agreement, signed in 2011, reduced tariffs on goods traded between India and Australia,
improving market access for businesses in both countries and making it easier for them to
engage in cross-border trade.
 5. India-China Bilateral Trade Agreement: This agreement, signed in 2018, aims to increase
trade between India and China, by reducing tariffs and improving market access for
businesses in both countries.
Overall, these trade agreements have had a positive impact on foreign trade and e-commerce in
India, helping to improve market access, reduce tariffs, and spur growth in cross-border trade.
They are an important consideration for businesses looking to engage in foreign trade and to
grow their e-commerce operations.

a).table of the comparative analysis of India's foreign trade and e-commerce practices with
various countries and regions:

Foreign Trade E-commerce

(Approx. Major Indian Major Indian Market Size
Country/Region Value) Exports Imports (Approx. Value)

Pharmaceuticals, IT Machinery, mineral

United States $88.75 billion services, textiles, fuels, aircraft $794.50 billion

Electrical
machinery,
Ores, organic mechanical
China $87.7 billion chemicals, cotton appliances $2.8 trillion

Textiles, garments, Machinery, mineral

European Union $83.46 billion organic chemicals fuels $581.84 billion

United Arab Mineral fuels, gems, Mineral oils,

Emirates $40 billion jewelry, cereals precious metals $3.9 billion

Electronic goods,
Refined petroleum, mineral fuels, palm
ASEAN $85 billion pharmaceuticals, oil $62 billion

Machinery,
Mineral fuels, iron electrical
Japan $17.63 billion and steel, organic equipment, vehicles $191.60 billion

Electrical
Refined petroleum, machinery, mineral
South Korea $16.36 billion organic chemicals, fuels, machinery $127.79 billion
 Foreign Trade E-commerce
(Approx. Major Indian Major Indian Market Size
Country/Region Value) Exports Imports (Approx. Value)

Petroleum oils, Mineral ores,

Brazil $6.36 billion organic chemicals, soybean oil, sugar $27.60 billion

Coal, gems, jewelry, Coal, natural gas,

Australia $23.17 billion pharmaceuticals copper ores $33.26 billion

Mineral fuels,
Petroleum products, pearls, precious
Africa $62 billion vehicles, machinery stones, wood $19.8 billion

Electrical
Refined petroleum, machinery, mineral
Southeast Asia $90 billion gems, jewelry, fuels, palm oil $62 billion

Machinery,
European Union Textiles, garments, electrical
(EU) $86 billion pharmaceuticals, equipment, pearls $508 billion

Mineral fuels,
Petroleum products, precious metals,
Middle East $121 billion gems, jewelry, fertilizers $22 billion

Machinery,
Textiles, electrical
pharmaceuticals, equipment, mineral
North America $95 billion machinery, fuels $861 billion

Mineral fuels,
Pharmaceuticals, precious stones,
Africa (Region) $62 billion vehicles, machinery metal ores Not available

Pharmaceuticals, Mineral fuels, ores,

Latin America $30 billion vehicles, organic copper $84 billion

Australia and New Pearls, gems, jewelry, Coal, mineral fuels,

Zealand $20 billion organic chemicals edible fruits $37 billion

Electrical
Southeast Asia Petroleum products, machinery, mineral
(Region) $88 billion pharmaceuticals, fuels, palm oil $62 billion
 Foreign Trade E-commerce
(Approx. Major Indian Major Indian Market Size
Country/Region Value) Exports Imports (Approx. Value)

Middle East Petroleum products, Mineral fuels,

(Region) $65 billion precious stones, fertilizers, plastics Not available

Mineral fuels,
Pharmaceuticals, pearls, precious
Russia and CIS $13 billion vehicles, organic stones $40 billion

9. Current Scenario of Foreign Trade and E-commerce in India

1. Foreign Trade:
• India is one of the largest economies in the world and has a vibrant international
trade sector.
• In 2020, India's total merchandise exports were valued at approximately $290
billion, with major export categories including petroleum products, gems and
jewelry, pharmaceuticals, textiles, and engineering goods.
• The country's major trading partners include the United States, China, the United
Arab Emirates, and the European Union.
• India has been actively engaged in bilateral and multilateral trade agreements to
boost its international trade, including initiatives like the Regional Comprehensive
Economic Partnership (RCEP) and negotiations for a Free Trade Agreement
(FTA) with the United States.
2. E-commerce:
• E-commerce has been rapidly growing in India, driven by factors such as
increased internet penetration, smartphone usage, and a favorable regulatory
environment.
• India's e-commerce market is dominated by major players such as Amazon,
Flipkart, and Snapdeal, along with the emergence of several niche platforms
catering to specific product categories.
• The e-commerce sector covers a wide range of products, including consumer
electronics, fashion, home goods, and groceries.
• The government has implemented various initiatives to promote e-commerce,
including the Digital India campaign and the introduction of policies like 100%
foreign direct investment (FDI) in online marketplaces.
3. COVID-19 Impact:
 • The COVID-19 pandemic had a significant impact on India's foreign trade and e-
commerce sectors in 2020.
• The nationwide lockdown and disruptions in global supply chains led to a decline
in trade volumes initially.
• However, e-commerce emerged as a resilient sector during the pandemic, with
increased online shopping activities and a shift towards digital payments.
• The pandemic also highlighted the importance of digital infrastructure, logistics
capabilities, and contactless delivery systems in the e-commerce ecosystem.
10. Factors Driving the Growth of Foreign Trade and E-commerce
Here are some key factors that have been driving the growth of foreign trade and e-commerce in
India in 2020:
1. Technological Advancements: Rapid advancements in technology, particularly in the
areas of internet connectivity, mobile devices, and digital infrastructure, have played a
significant role in driving the growth of foreign trade and e-commerce in India. Increased
internet penetration, coupled with the widespread use of smartphones, has created a
conducive environment for online transactions and e-commerce activities.
2. Government Initiatives: The Indian government has implemented several initiatives to
promote foreign trade and e-commerce in the country. Programs such as "Digital India"
aim to improve digital infrastructure and connectivity across the nation, enabling
businesses to engage in online activities more effectively. Additionally, policies such as
100% foreign direct investment (FDI) in online marketplaces have attracted investment
and facilitated the expansion of e-commerce platforms.
3. Changing Consumer Behavior: The preferences and behaviors of Indian consumers have
been shifting towards online shopping and e-commerce platforms. Factors such as
convenience, wide product variety, competitive pricing, and access to discounts and deals
have contributed to the increasing popularity of online shopping. This shift in consumer
behavior has fueled the growth of e-commerce in India.
4. Globalization and Market Access: India's participation in international trade agreements
and globalization efforts has provided businesses with access to global markets. Trade
liberalization measures and preferential trade agreements have reduced barriers to entry
and facilitated cross-border trade. This has encouraged businesses, particularly exporters,
to expand their reach and engage in foreign trade.
5. Improvements in Logistics and Supply Chain Infrastructure: Efforts to enhance logistics
and supply chain infrastructure have played a vital role in driving the growth of foreign
trade and e-commerce. Investments in transportation networks, warehousing facilities,
and last-mile delivery systems have improved the efficiency and reliability of the supply
chain, enabling businesses to expand their operations and reach a larger customer base.
 6. Rising Middle Class and Disposable Income: India's rising middle class and increasing
disposable income have contributed to the growth of foreign trade and e-commerce. As
more people have the financial means to purchase goods and services, the demand for
online shopping has witnessed a significant surge. The growing middle class population
has become a key driver of consumption and e-commerce growth in India.
11. Factors Driving the Growth of Foreign Trade and E-commerce
Several factors contributed to the growth of foreign trade and e-commerce in India:
1. Technological Advancements: Advancements in technology, such as improved internet
connectivity and the widespread use of smartphones, have facilitated the growth of e-
commerce. These advancements have made it easier for businesses to reach customers
and conduct transactions online.
2. Government Initiatives: The Indian government implemented various initiatives to
promote foreign trade and e-commerce. Programs like "Digital India" aimed to improve
digital infrastructure, while policies such as 100% FDI in online marketplaces attracted
investment and supported the expansion of e-commerce platforms.
3. Changing Consumer Behavior: Indian consumers have increasingly embraced online
shopping due to factors like convenience, a wide variety of products, competitive pricing,
and access to discounts. The shift in consumer behavior towards online shopping has
driven the growth of e-commerce in India.
4. Global Market Access: India's participation in international trade agreements and
globalization efforts has provided businesses with access to global markets. Trade
liberalization measures and preferential trade agreements have facilitated cross-border
trade and encouraged businesses to expand their reach.
5. Enhanced Logistics and Supply Chain Infrastructure: Investments in logistics and supply
chain infrastructure have improved efficiency and reliability. Better transportation
networks, warehousing facilities, and last-mile delivery systems have supported the
growth of e-commerce by enabling businesses to expand their operations and serve a
larger customer base.
6. Rising Middle Class and Disposable Income: The growth of India's middle class, coupled
with increasing disposable income, has fueled the demand for e-commerce. As more
people have the financial means to make purchases, the e-commerce sector has
experienced significant growth.
12. Challenges and Future Outlook
There were several challenges and future outlooks for foreign trade and e-commerce in India:
Challenges:
 1. Infrastructure Constraints: Inadequate physical infrastructure, including transportation
networks, logistics facilities, and digital connectivity, posed challenges to the smooth
functioning of e-commerce operations and efficient cross-border trade.
2. Regulatory Framework and Compliance: Complex regulatory frameworks, including
taxation policies and customs procedures, created compliance challenges for businesses
engaged in foreign trade and e-commerce. Ambiguities in regulations and frequent
changes in policies added to the complexity.
3. Cybersecurity and Data Protection: With the growing reliance on digital platforms,
cybersecurity and data protection emerged as critical concerns. The risk of data breaches,
online fraud, and cyber-attacks posed challenges to the trust and security of e-commerce
transactions.
4. Skill Development and Capacity Building: The rapid growth of e-commerce demanded
skilled manpower proficient in digital technologies, logistics, marketing, and customer
service. The need for adequate skill development initiatives and capacity building
programs to meet the industry's evolving requirements was a significant challenge.
Future Outlook:
1. Increased Adoption of Technology: The future of foreign trade and e-commerce in India
relied heavily on the continued adoption and integration of advanced technologies.
Innovations like artificial intelligence, machine learning, blockchain, and Internet of
Things (IoT) were expected to drive efficiency, enhance customer experiences, and
streamline trade processes.
2. Focus on Cross-Border Trade: Indian businesses were anticipated to expand their
presence in the global market through cross-border e-commerce. With increasing trade
liberalization and the ease of doing business, businesses were expected to explore new
markets and leverage international opportunities.
3. Enhanced Policy Framework: The Indian government's focus on promoting ease of doing
business and implementing supportive policies for e-commerce and foreign trade was
expected to improve the overall business environment. Streamlining regulations,
addressing compliance challenges, and providing a predictable policy framework were
crucial for the sector's growth.
4. Sustainable Practices: The future outlook emphasized the importance of sustainable
practices in foreign trade and e-commerce. Environmentally friendly initiatives, ethical
sourcing, and responsible supply chain management were expected to gain prominence as
consumers and businesses became more conscious of sustainability.
5. Rural Market Penetration: With the increasing availability of internet connectivity and
smartphones in rural areas, there was a growing opportunity to tap into the rural market.
The future outlook highlighted the potential for expanding e-commerce services and
reaching untapped consumer segments in rural India.
13.Conclusion
In conclusion, the year 2020 witnessed significant growth and transformation in foreign trade
and e-commerce in India. The sector experienced a surge in online transactions, cross-border
trade, and digital adoption. Several factors drove this growth, including the increasing internet
penetration, smartphone usage, rising consumer demand, and favorable government policies.
However, along with the growth came various challenges that needed to be addressed for
sustained progress.
Infrastructure constraints posed challenges to the seamless functioning of e-commerce operations
and efficient cross-border trade. Inadequate physical infrastructure, including transportation
networks and logistics facilities, hindered the smooth flow of goods and services. Additionally,
complex regulatory frameworks and compliance procedures created hurdles for businesses,
requiring them to navigate through ambiguous regulations and adapt to frequent policy changes.
Cybersecurity and data protection emerged as critical concerns, as the reliance on digital
platforms increased. The risk of data breaches, online fraud, and cyber-attacks posed threats to
the trust and security of e-commerce transactions. Skill development and capacity building
became essential to meet the industry's evolving requirements. The rapid growth of e-commerce
demanded a skilled workforce proficient in digital technologies, logistics, marketing, and
customer service.
Looking ahead, the future outlook for foreign trade and e-commerce in India is promising.
Continued adoption of technology, such as artificial intelligence, machine learning, and
blockchain, is expected to drive efficiency and enhance customer experiences. There will be a
focus on expanding cross-border trade as Indian businesses explore new markets and leverage
international opportunities.
To facilitate growth, an enhanced policy framework that promotes ease of doing business,
streamlines regulations, and addresses compliance challenges is crucial. Sustainable practices
and responsible supply chain management will gain prominence as consumers and businesses
become more conscious of environmental and social impacts. Moreover, tapping into the rural
market by leveraging improved connectivity and smartphone penetration presents a significant
opportunity for further expansion.
While the challenges are evident, the future prospects for foreign trade and e-commerce in India
are promising. By addressing the infrastructure constraints, regulatory complexities,
cybersecurity concerns, and skill development gaps, the sector can overcome obstacles and
achieve sustainable growth. It is imperative for stakeholders, including businesses, policymakers,
and industry participants, to collaborate and adapt to the evolving landscape, ensuring a
conducive environment for foreign trade and e-commerce to thrive in India.
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