Exports Scenario in India: Overview

Exports Scenario in India: Overview

Question: International trade is the way forward for furthering bilateral relations between nations. Discuss the exports scenario in India, in light of this.

- India had global share of 2.4% in trade during the time of independence and it fell to 0.7% in 1991 as a result of inward looking policy of self reliance and export of only the surplus

- BOP crisis in 1991 brought about a change in the economic philosophy of India with respect to international trade

- This opened up the economy and a new foreign trade policy resulted in India’s two way trade in both merchandise and services which reached close to USD 1 trillion annually from just USD 70 to 80 billion in 1991

- While India’s share in global merchandise rose from 0.7% in 1991 to 1.7% in 2013-2014, China’s has increased by a massive 11.8% from 1.8% during the same period

- In services trade, India’s share has risen from 1.2% in 1991 to 3 percent in 2013-2014

- China’s share was a mere 0.5% in global services trade in 1991 and has risen to 4% in 2013

- New foreign trade policy recently announced aims to ensure India reaches USD 900 billion of merchandise and services exports annually in 5 years

- Total two way trade is expected to double from USD 1 trillion to 2 trillion annually within the next 5 years

- It has made Indian trade more competitive

- New foreign trade policy has worked on trade facilitation and ease of doing business

- These are the 2 major areas where focus has been placed

- Numerous Aayat Niryat forms have been simplified to bring clarity

- Government has also formed an ambitious programme in the power sector for providing critical infrastructural services for foreign trade

- New FTP is also laying the ground for global trade engagement, trade promotion, infrastructure development and overall enhancement of the trade ecosystem

- 5 Year Trade Policy has also introduced 2 schemes namely Merchandise exports from Indian scheme for export of specified goods to specified markets and services exports from India scheme for increasing exports of notified services

- This has improved ease of doing business with respect to foreign trade

Facts and Stats

- Manufacturing sector’s exports plays an important role in volume of foreign trade. Over USD 40 billion of electronics goods is being imported next to oil and gold imports

- New electronics policy aims to attract USD 400 billion investments in the sector in the coming years

- Previous trade policy aimed to take Indian merchandise exports to USD 500 billion annually by 2013-2014 yet closed at USD 312 billion in 2013-2014