1. INDIA’S FOREIGN TRADE: VALUE COMPOSITION AND DIRECTION

2. Up to early 90’s the emphasis was on ‘Inward oriented’ policies
Up to early 90’s the emphasis was on ‘Inward oriented’ policies. This means large scale Import substitution( through extensive protection of Domestic industries), direct controls on imports and Investment and overvalued exchange rates, export sector was marked with extreme pessimism.

3. Continued……..
But during 1991 massive trade reforms were announced to open up the economy to foreign trade and to integrate the Indian economy in the Global economy

4. Volume of India’s foreign trade
India share in world trade (in %)
Year
Trade
1950
1.78
1991
.53
2000
.70
2005
1.00
2009*
1.5
* Means trade policy has set a target of achieving this target by 2009

5. A study on foreign trade data revels that trade balance was positive in only two years i.e and from the entire planning period till now

6. World trade report 2006 Total world merchandise exports in 2005.
10121 billion dollars
Country having highest merchandise exports.
GERMANY
Total Indian exports(2007)
150 billion dollars
% share of Indian exports in world exports
.89% in 2005
% share of China in exports in world exports
7.5 %

7. Composition of India’s Foreign Trade during 2005-06
Exports
Imports
Commodities share
Agri. And allied products
7.08
Crude petroleum
32.12%
Gems and jewellery
17.26
Pearls precious stones
7.77 %
Engg. Goods
18.27
Gold and silver
8.51%
Textile
14.32
Petroleum products
11.33

8. Composition of India’s trade during 2005-06 shows that Engg
Composition of India’s trade during shows that Engg. Goods and Gems and Jewellery possess the highest share in exports with 18.3% and 17.3 % respectively. Crude petroleum remains the highest import item in value term having 32.1 % share in total imports in the country during

9. Direction of Trade
In the pre independence period ,the direction of India’s foreign trade was determined not according to the comparative cost dvantage but by the colonial relations between India and Britain.
But now the situation has changed now india is having trade relation with each and every country of the world this is the result of New Economic Policy which India adopted during 90’s.

10. Direction of India’s Trade
Imports
Exports
OECD 78 54
32.7
66.1
53.5
44.2 EU
37.1
29.4
15.7
18.4
21.8
21.6
USA
29.2
12.1
5.5 16
14.7
16.7
OPEC
4.6
16.3
7.7
4.1
5.6
14.8
DEVELOPING COUTNRIES
CHINA - .1
7.5
6.5
SOURCE: RESERVE BANK OF INDIA REPORTS AND HANDBOOK OF STATISTICS

11. During Planning period as a whole ,India has obtained maximum imports from USA the reason being that India has imported large scale quantities of capital goods ,Intermediate goods and food grain from that country.
In , China occupied the first position in India’s imports(7.5%) followed be USA(5.5%).
In , USA with share of 16.7 (%) occupied first position in India’s Exports followed by UAE

12. Growth and Structure of India’s Foreign trade since 1991
India’s Trade has increased significantly in the post reform period. In absolute terms the trade volume rose from US $ 42.2 billion in to US $ billion.
In exports increased by 30.8% over the previous year while Imports increased by % over the previous year.

13. Foreign Trade Policy 2004-09 1.5 % share of global trade by 2009.
Special focus on five traditional exports – agriculture, leather & footwear etc so as to make exports.
Vishesh Krishi Upaj Yojana to be introduced for boosting exports of agriculture products.
Duty free Imports for service importers .