Chapter 05 DIRECTION OF INDIA S FOREIGN TRADE. Estelar

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1 Chapter 05 DIRECTION OF INDIA S FOREIGN TRADE

2 CHAPTER-05 DIRECTION OF INDIA S FOREIGN TRADE Trade and commerce have always played a significant part in the rapidly expanding multi faceted bilateral relations between India and U.S.A with each passing day there are new Indian business houses opening up shops in the U.S.A and vice versa, which in turn is helping the India US Trade to grow. From a modest US $ 5600 million in 1991, the bilateral trade in merchandise goods has increased upto US $ millionin 2006 and now it is US million dollars present growth in a span of 50 percent increase in 8 years. Over the last 8 years US exports to India have more than 22 percent increase of exports helping to create better paying jobs in the United State. Thereby improvingthe India US Trade relations. India s Merchandise exports to the US grew at percent from US $ million in 2005 to US $ million in 2006 and now the export to USA by India is increased by 45% in the period of 8 years from 2006 to Direction of India s Foreign Trade Direction of India s Foreign Trade is studied in relation to the country s proportion of exports to different countries and her proportionate imports from different countries. To study India s direction of foreign trade, her trading partners have been grouped in to fine major categories. (i) (ii) (iii) (iv) (v) Organisation of Economic co-operation and development (OECD) countries. Organisation of petroleum export countries (OPEC). Eastern Europe (EE). Less Developed countries (LDC s) excluding (OPEC). Others. 1. The OED is the largest trading partner of India. 93

3 2. The share of this group in India s total exports accounted for over 60 percent in This had however declined to 46 percent in Thereafter, it again rose to percent in and further to over 60 percent in and now the share of OPEC has reduced marginally at the end of the period of the study. 3. The U.S.A is a major trading partner of India. The share of U.S.A in India s total exports was percent in which has increased to percent in and further to percent in and now it is sharing only percent. 4. The share of U.S.A in India s import was over 29 percent in This however declined to percent in and now its share is 4.8% of India imports from U.S.A in the context of world. Everybodyknows that international trade is beneficial for all the trading countries. Nobody thought that India should prepare its aircrafts. Many people s are suspicious about the international trade that instead of trading with one another why don t we got self sufficient to produce that commodities at its own. Undoubtedly, it is possible but in realistic terms the international trade has real gains from trade in all aspects. The Range of these benefits is quite wider. It is common misconception that trade is harmful if there are large differences between the two countries it means if one country is developing and having its trade relations to the developed one than the developing country will face the definite losses but this is not true. Both the countries should get ready to face some of the hurdles which will definitely take place for both the countries. On the one hand if the less developed country has a fear about their industries for the foreign competition, at the same time the developed nations has also the fear of trading with less developed country to dry their standard of living down. As result we can see at the present that every (LDC) has its trade relations with the world s topmost or rich country s of the world. Developing nations are considered one of the big sale markets for the developed nations. 94

4 We can simply say that there is a type of greediness in both the countries, as the developed country was a need of the largest market for the sale of their goods and at the same time the developing countries has the desperate need of commodities for their consumption, by which they can enjoy by consuming the sophisticated goods and keep maintain their standard of living. So by their policy both the trading partners come very close with one another and finally their relationship turned in to friendship and both the countries than after works for the welfare for one another and remarkably improves the social, political and economical environment overall which is also helpful for the peace and prosperity of both the nations. Thus, it is justified that trade is a master model or a painkiller which can cure every type of disease among the different nations in the world. Now the question only arises that who to trade with whom? The answer of this question is quite different but that is dependent upon the basis of necessity of both the nations, only we have to find out abundance of our trading partner and if it fulfils` our requirements then we can blindly call her for the trade negotiations. Ever since the international trade has attracted the attention of economists from eighteenth century. David Hume, Adam Smith, David Ricardo and John Stuart will laid the foundation of the present day international trade. David Hume by his quantity theory of money tried to explain the effects of foreign trade on domestic prices. Absolute advantage theory of Adam Smith, comparative cost theory of David Ricardo and supply and Demand Theory of J.S. Mill are used as the analytical tools by the modern economists. In the modern times the balance of payments among the developed and developing nations has become the debatable issue from east to west and north to south among the economists. There is very rough and uneven trade share amongst the countries of the world some countries are enjoying the largest share of the world and others are just feeling about trade and in these countries now question arises in terms of shares. In the present time Globalization has made all the nations of the world integrated with one another and no country can live in isolation. There are generally two basis of international trade. Firstly if there is uneven distribution of natural resources. Secondly if the cost of production varies from nation to nation then there are full chances of Trade between them. The country which is abundant in labour may sell labour intensive goods and the country which is abundant in capital will export 95

5 the capital intensive goods. In this way both the countries will gains from trade. But is the price of an item is same in both the countries then there is no chance of trade and then the countries will never trade to one another. The maximum export and minimum imports results the favourable balance of trade for a country. The division of labour also helps in more production, improves qualities and lowers the cost of production thus bringing benefit to all the trading nations. Trade not only makes the benefits in social and political relations but it also helps in the improvement and distribution of technology among the different countries of the world. Commodity worship becomes the accepted creed of the people; there dawns in substance a new era of economic development with the bulk of the people living in the elegant or luxurious urban areas, only the unskilled and buds being left to till the land. Extension of markets and development of transport and power along with the development of banking facilities integrates the distant parts of the growing economy. The issue to examine is now this process called economic development affiants foreign trade and is affected by foreign trade. In other words the mutuality of cause and consequence relationship between foreign trade and economic development is the question to examine. International trade is a supplement of developing countries to domestic savings by borrowing from affluent countries by this way the developing countries can increase their rate of capital formation and can utilize their savings more productively. Every small or big country would become a part of the world economy. Therefore in the recent past the inter dependence among the different countries took place due to the technological revolution in communication and transport sector. The internationalization makes a country to think about the implications of its policies beyond its boundaries. The economic integration of nations is increasing the scope of international trade. The interdependence of economics makes them sensitive to the international happenings. Now the domestic economics are infect influence by the international happenings. Every economy of the world designs its monetary and fiscal policies to keep the outside world under consideration. The consequences of the development of the under development countries on the nature and composition of internal trade say after some years when most of the 96

6 countries of the world would become self radiant then there will be the new face of the world economics which would be quite interesting to examine. We can simply guess two possibilities. One is that there is fear in the advanced countries that they may possibly lose the markets for their manufactures in the backward countries succeed in their programme of industrialization they would manufacture all the things which they use to import from foreign countries will manufacture in their own country. Secondly, it is also argued that impact the international trade has got a fresh stimulus because of the increase in the national income of currently backward countries. The underdeveloped countries would also be able to have a much greater exportable surplus when they attain to a high stage of development. Hence, the demand for imports of developing countries from the developed one country is likely to be increased. The field of international trade has become more debatable in the recent years with views emerging on trade policy, determination of rate of exchange and the international coordination of macroeconomic policies. Although knowing this very well the underdeveloped countries undergo loses if they will keep themselves away from the world economy still they stressed on self reliance. They often try to protect themselves from foreign products. The world trade organisation (WTO) has gone a long way in the recent years to reduce the various tariff barriers for free trade, yet the non-tariff barriers are often restored to by nations to protect their markets from the outside products. The international trade analyse the various trade issues like subsidy, tariff, quota etc., while it also involves currency fluctuation, types of securities and moments in International capital market. According to Mordechai E. Kreinin, the international economics are concerned with the flow of commodity services and productive factors (Capital and Labour) across the national boundaries. There are three things which are necessary to understand that are: Trade in commodities, capital flow and labour flow. Trade in commodities simply refers to the imports and exports performed by the companies of one country for the residence of another capital flows means that the establishment of manufacturing plants in foreign countries. Labour flow describes the international flow of workers. The developed nations can help for the promotion of the process of 97

7 industrialization in an underdeveloped country by various means such as by reducing the tariff barriers and by accepting its consumer goods and semi-manufactured goods. Undoubtedly foreign aid is necessary for an underdeveloped country, but trade is more significant. As a result, Trade and Aid the most famous slogan which has been raised by the underdeveloped nations of the world. Diversification of Export After independence, when it thought for the increase in our exports. Firstly it is necessary to diversify them. The large numbers of industries have been developed since independence in India. The factories have been set up to produce the engineering goods, sewing machines, electrical goods, shoes, leather goods and machine tools etc. firstly these industries have been set up to meet out the domestic requirement for consumption but later on to give these industries more stress these factories are able to produce for exports also. Thus the industrialisation and economic development proved to be of supreme importance to our country after independence. Anyhow Indian Industries have a great need of raw material, technical known how which can be only possible by imports. India has not sufficient foreign exchange to take the industrial level at the top at their own level. At that time the foreign exchange we acquire to stabilize our economy in each and every field is in the shape of foreign in each and every field is In the shape of foreign aid or foreign debt and all is possible due to the openness of the Indian economy which helped particularly the industrial sector of India to reach at the prestigious level and shares upto 26% at the total Indians GDP present. For the long term interests of the country the planners feels to lay the stress on self reliance and to earn the foreign exchange by exporting maximum to the foreign countries. Indian has shown despotic upward exporting trends since independence are given in the forth coming tables and has also shown the directions of India s foreign overall. trade 98

8 Table No. 5.1 Export import and Trade balance of India (In US Million Dollar) Year Exports Import TB Exports Imports Export Import (%change) (% change) % GDP % GDP (P)a Source: - DGCI&S Kolkata P: Provisional a) Growth rate on Provisional over revised basis and based on Department of Commerce Methodology. 99

9 In the table No. 5.1 the export and import of India to the world are shown and trade balance realised that throughout the different years from to India is facing the trade in deficit which is increasing continuously throughout the years from upto now whereas in India exported worth US $ million increased more than double in the period of ten years reaches upto US $ million in which further raised to US $ million with an increment more than six times in a period of ten years from to can be concluded that the magnitude of exports of India to world are showing impressive results in relative and absolute terms. As if the import side of India from the different countries as the world on value basis in India imported the goods valued US $ millions which increased upto US $ millions in with an increment of more than double as in the exports of India to world. The imports of India further increased by more than nine times in ten years period and reaches upto US $ millions in The deficit in trade is one of the most burning and high priority issues in front of the planners of India. Table no. 5.2 Export of different groups of commodities from to (in US Million) Groups Years %share total exports Agriculture and Allied Products Ores and Minerals Manufactured goods Chemical and related products Engineering Goods Textile (Excluding RMG) RMG Rubber Manufacture Products Gems and Jewellery Source:- Computed from CMIE Bombay, DGCI&S Kolkata

10 Table No. 5.3 Principle Export of India: We export almost 210 commodities from our country to the other countries of the world. All the commodities are categorised in to nine groups. The groups and the number of commodities full under these are as: S. No. Groups No. of commodities 1 Agriculture allied products 37 2 Ores and Minerals 05 3 Manufactured good 07 4 Chemical and Related products 06 5 Engineering goods 12 6 Textiles (Exc. RMG) 18 7 RMG 05 8 Rubber manufactured products 01 9 Gems and Jewellery others 18 Source:- Computed from CMIE and DGCI&S Kolkata. The table No. 5.2 shows the trends of directions of the composition of exports of different commodities from India to world during the period of the study from to In this table manifested good are showing its highest contribution shares percent at the start of the period of study i.e. in ( ) and then slightly reduced to percent at the end of the study period. Any how the share of manufactured goods in the export of India s to the world is one of the significant contributions in the exports of India to world. Then engineering goods are also sharing at its high percent in the total exports of India to world. Relatively Engineering goods recorded very impressive contribution in the share of engineering goods to USA also. After that Gems and Jewellery, Agriculture and Allied products and some others are shown in the table with their contributions in percentage share in the total exports of India to the world. The principle exports of India are shown in the table No. 5.3 in which the commodities are almost grouped into ten groups against their numbers in front of them. These no. of commodities giving us an interesting story that agriculture and 101

11 allied products have the no. of 37 commodities but shares only 9.80 percent in the total exports of India to the world Although the engineering good and Gems and Jewellery has 12 and 1 number of commodities respectively but shares almost eighty percent of the total exports of India. Table no. 5.4 Trends of India s Foreign Trade ( to ) (Imports and Exports in Billion Rupees) Year Import Exports Trade bal Changes in Change in export Trade bal as imports % % of % exports Source:- Department of Commerce (Export and Import Data Bank) various Economic Survey and DGCI&S Kolkata for the year of and

12 Table No. 5.5 Merchandise Import and Export in US Dollar Billion Year Import Exports Trade bal Changes in Change in Trade bal imports % export % as% of exports A A A , Source:- Department of Commerce (Export Import Data Bank) various issues of Economics Survey and DGCI&S Kolkata RBI. In the larger and long term interest of the country the planners considered it desirable to lay emphasis on self reliance and to earn foreign exchange through increased exports. India s exports experienced and upward trend during the years immediately following independence. Overall trends in merchandise trade on customs basis during the recent years both in dollar and rupee terms are given in table No. 5.4 and 5.5 Table 5.4 depicts that India s imports have increased to Rs billion in as compared to Rs billion during , while the exports has increased Rs billion in as compared to Rs billion in and also the trade deficit has become more upto Rs billion in as compared to Rs billion This performance is marked by a high trade deficit about Rs billion per annum during the last five years of the period 103

13 study. The capacity of exports to finance imports (exports / imports ratio) declined in to about 75 percent from 78 percent in the in the previous years in the face of a fall in the growth of exports and sizeable growth in imports. However during to the trade deficit has been curtailed by nearly sixty percent (in dollar terms) due to sharp reduction in imports and then it has been increasing continuously upto 2008 India s merchandise exports and imports in (US $) grew by percent and percent respectively in , recording the lowest gap between growth rates after i.e percent and 5.00 percent. Table No. 5.6 India s Export, Import and Trade Balance ( to ) 104 (In Rs. Crore) Year Export Re-Export Growth Rate Import Growth Rate Trade Balance Source: Various Economic Survey of Different years from (1951 to 2012)

14 India s total exports, imports and trade rates balance are shown in Table. 5.6 from to (in terms of rupees). It is clear from the table export touched the mark of Rs crores in , compared to Rs. 606 crores during Trade Deficit increased more rapidly in the same period from 2 crores to Rs crores. The depressed international economic and trading environment a difficult balance of payments position and the dwindling foreign exchange reserves of the country continued to pose a serious challenge to export promotion effort of India. To meet these challenges effectively, a multipronged and multi-faceted approach has been adopted in the recent years in the form of innovative measures encompassing policy framework, institutional service support export incentives and new tools of exports promotion. Total volumes of trade under various five years plans are shown in Table. Table No. 5.7 India s foreign Trade in Plan period (Average) (Rs. in Crore) Period Exports Imports Balance Export as of Trade percentage of Imports First Plan to Second Plan to Third Plan to Three Annual Plan to Fourth Plan to Fifth Plan to Sixth plan to Seventh Plan to Annual Plan Eighth Plan ( ) Ninth Plan Tenth plan Eleventh Plan ( ) Source: Department of commerce (Export-Import Data Bank) Government of India annual report and economic survey of different years. 105

15 The table No. 5.7 deficits the volume of trade under the various five year plans in (Rs. crores) the table shows the performance of trade in Indian economy on value basis areas as: So far in India there has been framed eleven five years plan covering almost all the sectors of the country which may support to enhance the overall GDP of India, but particularly in this chapter the Import and export pattern in India has been analysed throughout the plan periods. India has also experienced three annual plans from to and the Annual Plans of and First and Second Five years Plans:- The First Plan has been announced and implemented in the year for the five years upto the years the exports during this plan period was estimated of Rs. 609 crores and imports of Rs. 723 crores facing the trade deficit of 114 cores. Similarly in the second five year plan the exports increased upto only 624 crores but correspondingly the imports increased highly and reached on 985 Rs. crores increased the trade in deficit to 361 Rs. crores and the growth rate has 1 percent and 2.2 percent for its respective plans. - Third Five Years Plan:- By the implementation of fiscal, financial and institutional measures by government of India to increase the exports and attractive proposition. The earth of India reached at the take off stage during this plan and got a big boost. - Three Annual Plans ( to ):- In June 1966 the Indian Government has devalued as India became more competitive in the global market but the devaluation also does not gave the good result and the position of India remained unaffected due to the withdrawals in incentive schemes coupled with drought conditions and poor harvests during the years results to widened the trade deficit during these three Annual Plans. - Fourth Five Year Plan:- India experienced for a single time in the trade history of India to accrue the trade surplus of Rs. 104 crores in This has happened because of the approval of export policy resolution in 1970 and import were liberalised to facilitate the greater export production early 1970 s witnessed a commodity boom in global markets. 106

16 - Consecutively During the three five years plans of Fifth, Sixth and Seventh, undoubtedly the export rose by more than double from Rs crores to 8904 Rs. crores in the 6 th plan and then to crores but correspondingly when the import side is analysed the Imports increased by more than five times during the three plan periods and at the end of the end of the seventh five year plan, as a result shows very depressive trends particularly regarding trade of India. - Two annual plans ( ) and , Eight, Ninth and Tenth Plans:- The annual plans and shows somewhat optimistic trends relatively at the end of the 7 th five year plans in India the trade in surplus of 3001 Rs. crores but after that for the 8 th, 9 th and 10 th five year plans the Indian economy again disappointed with the huge trade in deficit which reaches on Rs. crores at the end of the Tenth Five year plan. Just because of the non specific policies of Indian Government towards International trade and Indian manufacturing sector. Eleventh Five Year Plan: The eleventh five years plan the original annual growth target was put at 9 percent at the beginning of the plan due to the impact of global economic crisis during the years and The set target of the eleventh Five year plan was 9% but it remained unattainable and slipped down to almost 8%. The growth rates for the first three years raised up from 6.7% to 9% in As a result the trade patterns of India have also declined by the hindrances faced during the period of five year plan. In table no It is clear that the exports of India undoubtedly raised upto crores relatively over the preceding Five year plan from Rs crores but still shows the high trade in deficit of India estimating almost of Rs crores at the end of the plan. Twelfth Five Year Plan: In 2012 the Twelfth Five Year Plan was set up and implement on 27 December 2012 by the then government under the Prime Minister ship of Dr. Manmohan Singh. The Twelfth Five Year Plan is based on the following assumptions are as: - Enhancing the capacity for Growth. - Enhancing Skills and Faster Generation of employment. - Markets for efficiency and inclusion. - Technology and Innovation. - Managing Urbanisation. 107

17 Table No. 5.8 Direction of India s Exports (During to ) (US Million $) Year/countries EU (23.17) (22.54) (22.73) (21.84) (22.35) (21.19) (21.17) Southern Africa (1.05) (1.21) (1.23) (1.51) (1.88) (2.22) (2.21) ASEAN (7.88) (8.76) (9.11) (10.08) (10.09) (9.97) (10.05) WANA (13.18) (14.28) (15.95) (17.03) (16.18) (18.23) (18.63) NE Asia (13.28) (14.91) (14.70) (15.82) (15.73) (15.32) (16.22) North America (20.75) (21.99) (19.19) (17.51) (17.82) (15.79) (13.49) East Asia (1.15) (1.14) (110) (1.02) (0.97) (1.17) (0.86) South Asia (4.67) (5.28) (6.72) (5.51) (5.38) (5.11) (5.9) Other CIS Countries (2.06) (1.58) (1.38) (1.07) (1.04) (1.01) (0.92) Other developing countries (12.75) (8.27) (7.84) (8.54) (8.33) (9.93) (10.51) Total (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) (100.00) Source:- Department of Commerce, various Economic Surveys, DGCI&S of various years from 2001 to (21.93) (1.85) (10.48) (21.13) (13.80) (12.76) (0.97) (5.06) (0.97) (11.02) (100.00) (20.15) 3309 (1.86) (10.13) (22.02) (16.17) (11.56) 1690 (0.94) 8391 (4.69) 418 (0.79) (11.68) (100.00) (19.35) 5701 (2.27) (10.86) (22.60) (16.78) (10.72) 1966 (0.78) (5.13) 2570 (1.03) (10.48) (100.00) 108

18 Direction of India s Trade To study the Directions of India s Forests Trade. It is most appropriate to select the different regions of the world to which India exports its major proportion of the total exports to the world. In the table No. 5.8 it is clear that to simplify the magnitude of trade of India to the world is divided into ten regions are shown in the table no. 5.8 in which EU, South Africa, ASEAN, WANA, NE Asia, North America, East Asia, South Asia other CIS countries and other developing countries to these regions of the world India has significant exporting trade in terms of values in US $ million with the percentage share given with the given values in the same table. In the year India shares its maximum export to the EU North of value US $ in shares percentage of the total exports of India to the world which goes up almost four times increase to at the end of the period of the study but the share slipped slightly down by the share of percentage. Similarly other regions of the world are the significant share holders of the exports of the India from India. Table No. 5.8 further depicts that particularly the North America imported US $ million in increased more than double and reaches up to US $ million but the percentage is percent in the total exports of India to the world but slipped down to percent in shows very negative trends in terms of the percentage share. The table No. 5.9 (a), 5.9 (b) and 5.9 (c) again shows that the direction of India s exports on the basis of the groups of countries the world is already clustered in different regions in the table No. 5.8 but for the purpose of the study in table No. 5.9 the regions are further divided into different countries which received the exports from India on the value basis year wise. In this chapter almost 40 countries have been taken 10 crore the trends of exports of India to U.S.A which is shown in the table No. 5.9 purposively if the exports of India to U.S.A are concerned India exports worth US $ million in the year which raised upto US $ million with an increment of more than three times increased constantly year wise during the period of the study but shows a little decrease in the year ( ) from US $ million to US $ million, concluded it can be said that the share of exports of India to U.S.A is significantly increasing as compared to others countries of the world showing one by one in the table no

19 Further in table no the percentage share of exports of India is analysing country wise during the different years of the period of the study. This table depicts that the EU is the largest recipient of Indian goods computing percent of India s total exports in the year and at second number the North America attracts the maximum exporting percentage in which U.S.A receives about 19 percent of the exports of India in the total exports to world in the year In the some table the percentage share of India s export shows fluctuating trends during the period of the study relatively shows significant and drastic declining change took place reaches down to 0.62 percent in from percent in and further decreased to 0.54 in which became a serious matter of discussion by the view point of trade declined pattern of India particularly to U.S.A. Direction of India s Trade Bilateral and Regional Cooperation: Particularly with U.S.A India is moving towards the commercial and most favourable economic environment, although the trade between India and U.S.A are not occurring very high in terms of figures but in the long term India and U.S.A will be presentable examples of economic ties in the world. Generally India has always stood for an open equitable, predictable, non discriminatory and Role based international trade system. Considering that regional and bilateral trade and economic cooperation agreements scorning as building blodes towards achieving the multilateral trade liberalisation and bilateral negotiation with her trading partners to diversity and expand the markets for its exports. Some of the recent developments related to major Free Trade Agreements (FIAs) are as follows: i) India Japan Comprehension Economic Partnership Agreement (CEPA). ii) India ASEAN Trade in Goods Agreement. iii) iv) India EU Trade and Investment Agreement Negotiations. India European Free Trade Association (EFTA). v) India New Zealand FTA / CECA. vi) India Australia CECA. 110

20 Table No. 5.9 (a) Direction of India s Exports (During to ) (on the basis of Groups of Blocks) (US million $) 1.EU of which Belgium France Germany others South Africa of which South Africa Zimbabwe Others ASEAN of Which Indonesia Malaysia Singapore Others Years/countries

21 Table No. 5.9 (b) Direction of India s Exports (During to ) (on the basis of Groups of Blocks) (US million $) Years/countries WANA of which Israel Saudi Arbia UAE Others NE Asia Hong Kong Japan China Others North America Canada USA East Asia Australia New Zealand Others

22 Table No. 5.9 (c) Direction of India s Exports (During to ) (on the basis of Groups of Blocks) (US million $) Years/countries South Asia Nepal Pakistan Others Other CSI Countries Russia Ukraine Others Other developing countries Brazil Kenya Others India s total export Source:- Department of Commerce (Export and Import Bank) various years of (DGCI&S) Kolkata 113

23 Table No (a) Direction of India s Exports (During to ) (On the Basis of Groups or Blocks) (Percentage share) Years/countries EU of which a1.1 Belgium France A Germany a1.4 others South Africa of which South Africa Zimbabwe Others ASEAN of Which Indonesia Malaysia Singapore Others

24 Table No (b) Direction of India s Exports (During to ) (On the Basis of Groups or Blocks) 115 (Percentage share) Years/countries WANA of which Israel Saudi Arbia UAE Others NE Asia Hong Kong Japan China Others North America Canada USA East Asia Australia New Zealand Others

25 Table No (c) Direction of India s Exports (During to ) (On the Basis of Groups or Blocks) (Percentage share) Years/countries South Asia Nepal Pakistan Others Other CSI Countries A Russia Ukraine Others Other countries developing Brazil Kenya Others Indias total export Source: Department of Commerce (Export and Import Data Bank) various Economic Survey and DGCI and S, Kolkata. 116

26 Table No Export Growth and Share in world Exports of Selected Countries (During 2004 to ) Percentage Growth Rate Percentage Share Countries/Years China Malaysia a Indonesia Singapore Thailand a.2 a.3 a.3 Israel Korea India a a.3 a.5 a.9 USA Developing countries World Source: Department of commerce (Export-Import Data Bank) various Economic survey and DGCI&s, Kolkata 117

27 Percentage share of India s major trading partners in the world trade is thrown light with the help of Table It is observed from the table that U.S.A is the only country whose share the consistently during the period of study. UAE has made a remarkable increase in its share in the total world trade which has gone from 3.4 percent to percent at the end. After UAE, similar is the case with China whose share has increased from 2.5 percent to percent during the period. Thus U.S.A holding the third position after UAE and China at the end of the period. The fourth place goes to Singapore whose share has also slightly increased from 2.5 percent to 2.81 percent during the period. U.S.A still hold the third position after China which has an important place in the total world trade but its share has come down from 13.0 percent in the beginning to 7.35 percent at the end of the period. However, Germany has almost maintained its position with almost the same share in the total world trade during the period. On the other hand the share of UK, Belgium, Israel, Japan and Hong Kong has consistently come down almost the year after year during the period of study. Thus, it may be inferred that China and UAE. Table No India s Trade Share and Export Import Ratio with major trading partners Rank Country Share in total trade Export / Import Ratio a P 1. China USA UAE Source:- Computed from DGCI&S data. Note:- a A coefficient of export and import ratio between 0 and 1 implies that India s imports are greater than exports and if the coefficient in greater than one, India exports more than its imports. P: Provisional India s trade share and export Ratio with major trading partners are shown in the table No with the performance of share in total trade in the recent years in the years , , and (Provisional) China is the leading head followed by U.S.A with the total share of trade of 7.30 percent in which raised exclusively upto 8.06 percent provisionally in the year , which is then followed by UAE. 118

28 S.No. Table No India s Major Trading Partners percentage share in total Trade (Exports + Imports) (During to ) Countries/ Years 1 USA UK Belgium Singapore Israel UAE Japan Germany China Hong kong Total Source: Department of commerce (Export-import Data bank) various Economic survey and DGCI&S Kolkata. 119

29 Have been successful increasing their share in the world trade almost throughout the period of study leaving UAE and other countries except China behind in respect of share in the world. Table No India s share in world Exports (During 1950 to 2011) Year Share in percent Year Share in percent Source: various issues of United Nations International Trade Statistics Year Book, and for the year 2001 & 2012 data accessed on 26 th may, It is clear from the Table 5.14 that India s share in world merchandise exports after remaining unchanged at 0.80 percent 2003 and 2004 and has touched the level of 1.60 percent in This increase was due to India s exports growing at more than double rate of growth of world exports since U.S.A has been a star exports growth was surpassed that of China, India s significant exports growth in recent year was because of a most of favourable external developments and domestic policy initiatives, improved global growth and recovery in world trade aided the growth of India s Exports. The opening up of the economy and corporate restricting has enhanced that competitiveness of Indian industry. There is far greater Export orientation of domestic manufactures and corporate sector has been pursuing new growth strategies in response to economic reforms. Firming up of domestic economic activity, especially resurgence of manufacturing sector. 120