India s International Trade & Investment

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1 India s International Trade & Investment July

2 Structure of Presentation 1 Indian Economy: A Snapshot 2 Merchandise Trade: A Perspective 3 Services Trade: Recent Trends 4 India s Investment Flows 22

3 India: An Emerging Economic Powerhouse Strong Economic Fundamentals World s 7th largest economy based on nominal GDP in 2016 (1) o Nominal GDP for 2016: ~US$ 2 trn (1) World s 3rd largest economy based on GDP measured in PPP terms in 2016 (2) o GDP in PPP terms for 2016: ~US$ 8.7 trn (1) Favorable demographic profile: 66% of the population is in the age group of 15 to 64 years (2) Sovereign rating: Baa3/Positive (Moody s), BBB-/Stable (S&P), BBB-/Stable (Fitch). According to the IMF, India s economy has grown at a strong pace in recent years owing to the implementation of critical structural reforms, favorable terms of trade, and lower external vulnerabilities. Source: (1) IMF World Economic Outlook April (2) World Bank Database. 33

4 Indian Economy Snapshot PARAMETER FY 2013 FY 2015 FY 2016 FY 2017 GDP (current prices, US$ bn) GDP Growth (constant prices, %) # Agriculture & allied activities (% change) # Industry (% change) # Services (% change) # Inflation rate (CPI, annual avg. %) IIP (general, % change) Merchandise Trade Balance (US$ bn) Services Trade Balance (US$ bn) Current Account Balance (US$ bn) CAB as percentage of GDP (%) External Debt (US$ bn) Forex Reserves (US$ bn) (as on end-march) FDI Inflows (US$ bn) FDI Outflows* (US$ bn) Exchange Rate (annual avg., ` /US$) Note: # - provisional estimates; * - FDI Outflows include Equity, Loan and Guarantee Issued; FYxx means financial year ended March 31, 20xx. Source: IIF, MOCI, CSO, RBI 44

5 (US$ bn) India s Merchandise Trade Increased Global Integration through Trade Decline in global commodity prices and weak demand resulted in subdued global trade. Trade deficit declined significantly from US$ 190 bn FY2013 to US$ 106 bn in FY2017. FY 13 FY 14 FY 15 FY 16 FY India s share in global merchandise trade stood at 1.9% (2016). Export Import Trade Balance Source: MOCI; WTO 55

6 India s Major Trading Partners India s largest trading partners in FY2017 Top Export Destinations ( FY 2017) Top Import Sources (FY 2017) USA 15.3% China 16.0% UAE 11.3% U S A 5.8% Hong Kong 5.1% UAE 5.6% China 3.7% Saudi Arabia 5.2% Singapore 3.5% Switzerland 4.5% UK 3.1% Indonesia 3.5% Germany 2.6% Republic of Korea 3.3% Vietnam 2.5% Iraq 3.1% Bangladesh 2.4% Germany 3.0% Belgium 2.1% Australia 2.9% Source: MOCI 66

7 China USA UAE Saudi Arabia Hong Kong Germany Switzerland Indonesia Republic of Korea Singapore Malaysia Australia Japan Iran Iraq (US$ bn) India s Major Trading Partners India s largest trading partners in FY2017 Total Trade Trade Balance Source: MOCI 77

8 India s Trade Basket Top Export Items (FY 2017) Top Import Items (FY 2017) Gems & jewellery 15.8% Petroleum Products 22.7% Textiles & allied products 13.0% Gems & Jewellery 14.1% Chemicals & related products Agriculture & allied products* 11.9% 11.6% Electronics Items Chemicals 11.0% 8.8% Petroleum products 11.4% Machinery 8.6% Transport equipments 8.4% Agriculture & Allied Products* 6.3% Base metals 8.0% Ores & Minerals 5.6% Machinery 7.2% Base Metals 5.6% Plastic & rubber articles 2.3% Transport equipment 4.7% Electronic items 2.1% Plastic and rubber articles 3.7% * Includes plantation and marine products Source: MOCI 88

9 Electronic items Gems & jewellery Machinery Ores & minerals Petroleum & crude prdts ( US$ bn) Textiles & allied prdts 30.4 Agriculture & allied prdts* 8.1 Transport equipment 5.1 Leather & its manufacturing 4.3 Articles of stone/ cement 1.8 India s Trade Basket Top 5 commodities in India s trade basket with surplus/deficit in FY2017 Top 5 Commodities with Trade Deficit Top 5 Commodities with Trade Surplus * Includes plantation and marine products Source: MOCI 99

10 India s Share in Global Merchandise Exports Rankings Country 2005 (%) Country 2010 (%) Country 2016 (%) 1 Germany 9.2 China 10.3 China USA 8.6 USA 8.4 USA China 7.3 Germany 8.2 Germany Japan 5.7 Japan 5.0 Japan France 4.4 Netherlands 3.8 Netherlands Netherlands 3.9 France 3.4 Hong Kong UK 3.7 South Korea 3.0 France Italy 3.6 Italy 2.9 South Korea Canada 3.4 UK 2.7 Italy Belgium 3.2 Belgium 2.7 UK Hong Kong 2.8 Hong Kong 2.6 Belgium South Korea 2.7 Russia 2.6 Canada Russia 2.3 Canada 2.5 Mexico Singapore 2.2 Singapore 2.3 Singapore Mexico 2.0 Mexico 1.9 Switzerland Chinese Taipei 1.9 Chinese Taipei 1.8 Spain Spain 1.8 Spain 1.7 Russia Saudi Arabia 1.7 Saudi Arabia 1.6 Chinese Taipei Malaysia 1.3 India 1.5 UAE Sweden 1.2 UAE 1.4 India Switzerland 1.2 Australia 1.4 Thailand Austria 1.2 Brazil 1.3 Poland Brazil 1.1 Malaysia 1.3 Australia UAE 1.1 Switzerland 1.3 Malaysia Thailand 1.1 Thailand 1.3 Brazil Ireland 1.0 Poland 1.0 Viet Nam Australia 1.0 Sweden 1.0 Saudi Arabia Norway 1.0 Indonesia 1.0 Czech Republic India 0.9 Austria 1.0 Austria 1.0 Soure: WTO 10

11 India s Trade in Services Strong Services Exports (US$ bn) FY13 FY14 FY15 FY16 FY 17 Exports Imports Trade Balance FY13 FY14 FY15 FY16 FY 17 Software Services Export (US$ bn) 11 Source: RBI

12 India s Share in Global Services Exports Ranking Country 2005 (%) Country 2010 (%) Country 2016 (%) 1 USA 14.7 USA 14.3 USA UK 8.1 UK 6.9 UK Germany 6.4 Germany 6.4 Germany France 4.8 France 5.0 France Japan 4.3 China 4.2 China Spain 3.7 Japan 3.6 Netherlands Netherlands 3.6 Spain 3.2 Japan Italy 3.5 Netherlands 3.0 India China 2.9 India 3.0 Singapore Hong Kong 2.5 Hong Kong 2.7 Ireland Ireland 2.3 Ireland 2.5 Spain Belgium 2.2 Italy 2.5 Switzerland Canada 2.2 Singapore 2.4 Belgium Singapore 2.2 Belgium 2.4 Italy India 2.0 South Korea 2.2 Hong Kong Switzerland 1.9 Switzerland 2.1 Luxembourg South Korea 1.9 Canada 1.9 South Korea Denmark 1.7 Luxembourg 1.6 Canada Sweden 1.7 Denmark 1.6 Sweden Austria 1.7 Sweden 1.6 Thailand 1.4 Source: WTO 12

13 (US$ bn) India s Foreign Direct Investment Flows Foreign Direct Investment Inflows and Outflows FDI inflow into India increased to US$ 60.1 bn in FY2017, as compared to US$ 34.3 bn in FY2013, mainly due the two-fold rise in equity inflows during the period. FDI outflow from India stood at US$ 24.9 bn in FY2017, against FY 13 FY 14 FY 15 FY 16 FY 17 FDI Inflows FDI Outflow US$ 22.0 bn in FY2013 Note: FDI InflowFDI Outflows include Equity, Loan and Guarantee Issued Source: RBI 13

14 India s Foreign Direct Investment Flows India s FDI Inflows FY2017 stood at US$ 43.5 bn # Top FDI Investing Countries Sector-wise FDI Inflows Cyprus 1% Germany 2% Netherlands 8% France 1% USA 6% UK 3% UAE 2% Japan 11% Others 10% Singapore 20% Mauritius 36% Metallur gical Industri es 3% Others, 39% Power Chemicals 3% 3.2% Services Sector*, 20% Telecommu nications 13% TradingPharma 5% 2% Computer Software & Hardware 8% Automobile Industry 4% #- data is for FDI equity inflow; * - Services sector includes Financial, Banking, Insurance, Non-Financial / Business, Outsourcing, R&D, Courier, Tech. Testing and Analysis Source: DIPP 14

15 India s Foreign Direct Investment Flows India s FDI Outflows FY2017 (US$ 24.9 bn) Destination-wise FDI Outflows Sector-wise FDI Outflows Channel Island 2% Cyprus 2% Switzerland 3% British Virgin Island 3% U.K 5% UAE 5% Others Transport, 4% 18% Singapore storage and Financial, 22% communicat insurance ion services and business 7% services 24% USA 8% Netherlan ds 15% Mauritius 17% Wholesale, retail trade, restaurants and hotels 18% Community, social and personal services Electricity, gas and Others water 3% 2% Manufacturi ng 20% Agriculture and mining 22% Note: FDI Outflows include Equity, Loan and Guarantee Issued (Approved ODI) Source: RBI 15

16 16

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