Index

1. Introduction
Trade Policy
Foreign Trade
2. History of Foreign Trade
3. Legal Framework Of Foreign Trade Policy
4. eneral Framework
!. Pro"isions on Im#ort $ %&#ort
'. (anking $ Finance
). %&ternal Trade $ In"estment
lo*al Trade +elations
(alance of Payment
Foreign direct In"estment
,urrency
Income $ ,onsum#tion
Im#ort -uty $ Ta&es
.. Indian Im#orts $ its ,om#osition
/. Trend in India0s Foreign Im#orts
Trade Performance
1orld Trade 2cenario
Im#ort Of 2ensiti"e Items
2ummary of Im#ort 2ensiti"e Items
Im#ort of Princi#al ,ommodities
CHAPTER I
INTRODUCTION
,reation of a##ro#riate institutional framework and su##orti"e en"ironment facilitates t3e
growt3 of e&ternal trade. In a de"elo#ing country like India4 t3e real *arometer of
sustained economic de"elo#ment is t3e growt3 inde& of e&#orts. 2ustained growt3 in
e&#orts can only *e accelerated *y conduci"e framework. T3e #rimary o*5ecti"e and
em#3asis of t3e framework is towards accelerated de"elo#ment wit3 t3e re6uired
regulation to su##ort t3e
Framework structure. T3e role of regulation is to #rotect t3e interests of consumers4 o*tain
conditions of com#etition and foster t3e institutional framework. T3e #resent regulatory
framework in India is 3ig3ly su##orti"e. T3e attitude of t3e go"ernment4 a "ery im#ortant
as#ect for faster #ace4 is #oised in t3at direction to make t3e framework ac3ie"e t3e
sustained growt34 remo"ing t3e *ottlenecks4 3indering t3e #at3 of #rogress and
de"elo#ment.
TRADE POLICY
Trade #olicy is one of t3e many economic instruments for ac3ie"ing economic growt3.
T3e *asic twin o*5ecti"es of t3e trade #olicy 3a"e *een to #romote e&#orts and restrict
im#orts to t3e le"el of foreign e&c3ange a"aila*le in t3e country. T3e in3erent #ro*lems of
t3e country 3a"e *een non7a"aila*ility8acute s3ortage of crucial in#uts like industrial raw
materials4 su##orting rele"ant tec3nology and re6uired ca#ital goods. T3e #ro*lems can *e
remo"ed *y im#orts. (ut4 continuous im#orts are neit3er #ossi*le nor desira*le. T3e ga#
*etween e&#orts and im#orts is financed t3roug3 *orrowing and foreign aid. Howe"er4
im#orts must *e financed *y e&#orts4 in t3e long run. T3e *asic o*5ecti"e of t3e trade
#olicy re"ol"es round t3e instruments and tec3ni6ues of e&#ort #romotion and im#ort
management.
FOREIGN TRADE
Foreign trade is recogni9ed as t3e most significant determinants of economic de"elo#ment
of a country4 all o"er t3e world. For #ro"iding4 regulating and creating necessary
en"ironment for its orderly growt34 se"eral :cts 3a"e *een #ut in #lace. T3e foreign trade
of a country consists of inward and outward mo"ement of goods and ser"ices4 w3ic3
results into outflow and inflow of foreign e&c3ange. T3e foreign trade of India is go"erned
*y t3e Foreign Trade ;-e"elo#ment $ +egulation< :ct4 1//2 and t3e rules and orders
issued t3ere under. Payments for im#ort and e&#ort transactions are go"erned *y Foreign
%&c3ange =anagement :ct4 1///. ,ustoms :ct4 1/'2 go"erns t3e #3ysical mo"ement of
goods and ser"ices t3roug3 "arious modes of trans#ortation. To make India a 6uality
#roducer and e&#orter of goods and ser"ices4 a#art from #ro5ecting suc3 image4 an
im#ortant :ct>%&#orts ;?uality control $ ins#ection< :ct4 1/'3 3as *een in "ogue.
-e"elo#mental #ace of foreign trade is de#endent on t3e %&#ort7Im#ort Policy ado#ted
(y t3e country too. %"en t3e %&im Policy 2@@272@@) lays its stress to sim#lify #rocedures4
23ar#ly4 to furt3er reduce transaction costs. Today0s international trade is not only 3ig3ly
com#etiti"e *ut also dynamic. Aecessary res#onsi"e framework to make e&#orts com#ete
glo*ally4 is essential. In order to 3arness t3ese gains from trade4 t3e transaction costs4 in
turn de#endent on t3e framework su##ort4 in"ol"ed need to *e low for trading wit3in t3e
country and for international trade. International trade is a "ital #art of de"elo#ment
strategy and it can *e an effecti"e instrument of economic growt34 em#loyment generation
and #o"erty alle"iation. =arket conditions c3ange4 almost daily4 re6uiring 6uick res#onse
and more im#ortantly4 antici#ation of t3e future re6uirements is t3e need of t3e 3our. To
gear wit3 t3e c3anging re6uirements4 it is essential t3at t3e framework 3as to remain in
#ace and c3ange in antici#ation4 accordingly4 and t3en only international trade can #ick u#
t3e s#eed en"isaged.
CHAPTER II
HISTORY OF FOREIGN TRADE
Why Imports?
(ecause of toug3 com#etition4 you can sell only if t3e 6uality of your #roduct is *etter
t3an t3at of your com#etitors4 t3e #rice most com#etiti"e and t3e *uyers get deli"ery on
time. In order to ac3ie"e all t3is4 one needs to 3a"e access to international standard 6uality
materials and ca#ital goods. 1e also need to 3a"e *etter tec3nology at our command as
t3ere is a sea c3ange in t3e markets worldwide. 1e 3a"e mo"ed from letters to e7mails4
tele fa&es to "ideo conferencing and manually o#erated #3ones to cellular #3ones "ia
satellite. Today it is not #ossi*le to com#ete in t3e world wit3out a *etter tec3nological
#roduct. 1e cannot matc3 t3e standards of 6uality and ser"ices t3at ot3ers offer if we
3a##en to *e out7dated B and t3at means out of market as well. (y acce#ting mem*ers3i#
of t3e 1orld Trade Organisation ;1TO<4 India 3as *ecome a #art of t3e glo*al "illage.
Aew trade *locks are emerging and new world order is getting esta*lis3ed.
%"en regional trading arrangements ;+T:s< are mus3rooming an it is estimated *y t3e
1TO t3at *y 2@1@ t3ere would *e close to 4@@ +T:s. %"en India is negotiating *ilateral
agreements wit3 "arious countries and regional grou#ings. : num*er of 5oint "entures are
*eing signed for e&#ort #romotion as well as *etter 6uality #roduction for domestic
market.
T3e F-I inflows into t3e country from 1//1 to Cune4 2@@. stand at more t3an D ./ *illion.
1e 3a"e witnessed a ma5or c3ange in t3is area *etween t3e years 1//272@@) and if one
scans t3roug3 t3e news#a#ers4 one will find t3at economic news 3as taken #riority o"er
#olitical news. T3e area in w3ic3 t3e im#orts are almost essential are defence
re6uirements4 crude oil4 fertili9ers4 ca#ital goods4 industrial in#uts like raw materials4
com#onents4 consuma*les4 s#ares4 etc.4 im#ort of sam#les4 im#ort of tec3nology4 im#ort of
drawing and designs4 im#ort of ser"ices etc. T3ere are many "ital areas w3ere t3ere is a
need to im#ort ca#ital goods 7 new as well as second 3and B in order to u#grade our
#roducts and ser"ices.
Furt3er4 t3ere is an increase in factor mo*ility. T3e "arious factor of #roduction like raw
materials4 la*our4 ca#ital goods4 s#ares4 consuma*les4 etc. 3a"e *ecome mo*ile. It is easy
to relocate any of t3ese factors from one country to anot3er de#ending on w3ere t3ey are
needed. T3is gi"es rise to o##ortunities w3ere "arious com#onents of a "alue c3ain are
com#leted in different countries. For e&am#le4 a com#any in E2: may *uy fa*ric from
,3ina4 source design from Italy4 la*our from (anglades3 and 2ri Lanka and arrange to
make a garment to *e sold in %uro#e. Likewise4 in t3e case of contract manufacture4 a firm
makes a contract wit3 anot3er firm a*road w3ere*y t3e contracted #arty manufactures or
assem*les a #roduct on *e3alf of t3e contractor. T3e contractor retains full control o"er
marketing and distri*ution w3ilst t3e manufacturing is done *y t3e local com#any.
The advantages of such outsourcing are:
T3ere is no need to in"est in #lant o"erseas
T3e risks of asset e&#ro#riation are minimi9ed
+isks associated wit3 currency fluctuations are *etter managed
,ontrol of marketing is retained *y t3e contractor
: #roduct manufactured in t3e o"erseas market may *e easier to sell4 es#ecially to
go"ernment customers
Lower trans#ort costs and
2ometimes lower #roduction costs can *e o*tained.
To sum u#4 it is not #ossi*le to sur"i"e wit3out im#orts w3en t3e world is mo"ing so
ra#idly towards glo*ali9ation and li*erali9ation. T3e #3enomena of glo*al sourcing at t3e
most com#etiti"e costs and t3e need to increase #roducti"ity of t3e domestic industry
t3roug3 t3e im#orts of 3i7tec3nology #roducts 3as resulted in im#ort li*erali9ation *eing
an im#erati"e tool for economic growt3.
CHAPTER III
LEGAL FRAMEWORK OF FOREIGN TRADE POLICY
India`s exports and imports are governed by:
Foreign Trade ;-e"elo#ment $ +egulation< :ct4 1//2
Foreign Trade ;+egulation< +ules 1//3
Foreign Trade ;%&em#tion< Order 1//3
%&#ort and Im#ort Policy 7 now called Foreign Trade Policy
Hand*ook of Procedures B Fol. I
Hand*ook of Procedures B Fol. II incor#orating t3e 2tandard In#ut Out#ut Aorm
IT, ;H2< ,lassification of Im#ort and %&#ort Policy
Foreign Trade (Development & Regulation) Act, 1992
The Salient features of the Act are as follows:
;1< O*5ecti"eG -e"elo#ment and regulation of foreign trade *y facilitating im#orts and
augmenting e&#orts.
;2< 2ection 3 G %na*les t3e ,entral o"t. to make de"elo#ment and regulation of foreign
trade and #ro3i*it4 restrict or ot3erwise regulate im#ort and e&#ort of goods
;3< 2ection ! G %na*les t3e ,entral o"t. to formulate and announce t3e %&#ort and Im#ort
Policy and also amend t3e Policy
;4< 2ection 'G Pro"ides for a##ointment of -irector eneral of Foreign Trade to ad"ise t3e
,entral o"t. in t3e formulation of t3e %&#ort and Im#ort Policy and *e res#onsi*le for
im#lementation of t3e same.
;!< 2ection ) G Pro"ides t3at any im#ort8e&#ort can *e made only *y a #erson 3olding an
Im#orter %&#orter ,ode Aum*er
;'< 2ections . and / G Pro"ide for issue4 renewal4 refusal or cancellation of Im#orter
%&#orter ,ode Aum*er or license to e&#ort or im#ort
;)< 2ections 1@ to 14 G Pro"ide for searc3 and sei9ure4 fiscal #enalty8confiscation in t3e
e"ent of contra"ention4 and ad5udication and reasona*le o##ortunity to t3e owner of goods
;.< 2ection 1! to 1) G Pro"ide for :##eal4 +e"ision and #owers of ad5udicating and ot3er
aut3orities
Foreign Trade (Regulation) Rules, 1993
T3ese +ules are made under t3e +ule making #owers "ested wit3 ,entral o"t. under
2ection 1/ of t3e Foreign Trade ;-e"elo#ment and +egulation< :ct4 1//2.
The salient features are:
;1< +ule 3G %na*les t3e -irector eneral of Foreign Trade to issue 2#ecial Licences to
#ersons w3ose Im#orter %&#orter ,ode Aum*ers 3a"e *een sus#ended or cancelled.
;2< +ule ! G 2#ecifies t3e scale of fees to *e #aid towards a##lications for licences and
categories w3ic3 are e&em#t from #ayment of fees
;3< +ule ' G -etails t3e general conditions a##lica*le to licences and Im#ort ,ertificates
issued under t3e Indo7E2 =emorandum of Enderstanding
;4< +ule ) G 2#ecifies t3e circumstances under w3ic3 a licence can *e refused
;!< +ule . G %na*les t3e licensing aut3ority to amend a licence
;'< +ule / G -eals wit3 sus#ension of licences
;)< +ule 1@ G -eals wit3 cancellation of licences
;.< +ule 13 G Indicates t3e manner of utili9ation of goods allotted *y 2T, etc. and of t3e
goods im#orted against a licence
Foreign Trade (Exemption from application of Rules) Order, 1993
T3e main feature of t3is Order is t3at it details t3e categories of im#orts and e&#orts4
w3ic3 are e&em#t from t3e a##lication of +ules. Important exemptions are as under:
A. Imports
;1< Im#orts for defence #ur#oses
;2< Im#ort *y ,entral82tate o"ernment or Pu*lic 2ector Endertaking t3roug3 t3e India
2u##ly =ission at 1as3ington and London
;3< Im#orts for transit to ot3er countries
;4< Im#orts under (aggage +ules
;!< Personal Im#orts
;'< Im#orts *y -i#lomatic Personnel
;)< EA officials
;.< Tem#orary Im#orts for fairs4 %&3i*itions etc.
CHAPTER IV
GENERAL PROVISIONS REGARDING IMPORTS AND
EXPORTS
Import Policy- ITC (HS)
T3e li*erali9ation of Indian economy started wit3 t3e e&ternal sector. T3e +u#ee was
de"alued in two stages in Culy 1//1. T3is was immediately followed *y a*olition of direct
e&#ort su*sidies. Im#ort licensing was a*olis3ed for many items4 including ca#ital goods.
: new ty#e of im#ort licence called %&im 2cri# was introduced. %&im 2cri# was a"aila*le
against e&#ort of goods and it was freely transfera*le in t3e market. T3e licence was "alid
for im#ort of a *road range of goods. 2o4 im#orters wanted %&im 2cri#s *ut only e&#orters
could earn t3em. T3e #remium on sale of t3e %&im 2cri# was an incenti"e for t3e
e&#orters.
In Fe*ruary 1//24 t3e Enion (udget introduced a dual e&c3ange rate mec3anism. Ender
t3e Li*eralised %&c3ange +ate =ec3anism ;L%+=2<4 +eser"e (ank of India sold foreign
e&c3ange for essential #ur#oses at official e&c3ange rates. Ot3er im#orters 3ad to *uy
foreign e&c3ange at market determined rates4 w3ereas t3e e&#orters could sell foreign
e&c3ange at a com#osite rate i.e.'@H at market rates and 4@H at official e&c3ange rates.
%&im 2cri#s were a*olis3ed after dual e&c3ange rate mec3anism was introduced.
T3e li*erali9ation #rocess called for a*olition of controls. T3e 1//27/) %&#ort and Im#ort
Policy ;%&im Policy< 3eralded 3istoric c3anges. It was t3e first fi"e7year Policy. It was
coterminous wit3 t3e %ig3t3 Fi"e Iear Plan. T3e Policy recogni9ed t3at trade can flouris3
only in a regime of su*stantial freedom. It reinforced t3e direction set *y t3e trade #olicy
reforms initiated in Culy 1//1. T3e Policy com#lemented t3e c3anges in industrial and
fiscal #olicies.
T3e fundamental feature of t3e new Policy was to su*stantially eliminate licensing4
6uantitati"e restrictions and ot3er regulatory and discretionary controls. Earlier, all goods
were restricted for imports unless specifically permitted for imports. The new Policy
ordained that all goods could be freely imported unless specifically restricted,
through a Negative List of Imports.
T3e Aegati"e List was ke#t as small as #ossi*le and t3e Policy of t3e o"t. was to
#rune t3e list from time to time as t3e economy gained in strengt3. T3e restrictions were
on t3e grounds of #u*lic #olicy. T3e restrictions were considered necessary for
economic reasons as well as on grounds of safety4 security4 en"ironment4 em#loyment and
t3e like.
In t3e 1//27/) Policy4 t3e List of +estricted Items consisted of 11 categories as underG
;a< ,onsumer oods ;11 entries<
;*< Precious4 2emi7#recious and ot3er stones ;! entries<
;c< 2afety4 2ecurity and related items ;' entries<
;d< 2eeds4 Plants and :nimals ;4 entries<
;e< Insecticides and Pesticides ;2 entries<
;f< %lectronic Items ;/ entries<
;g< -rugs and P3armaceuticals ;/ entries<
;3< ,3emicals and :llied Items ;2 entries<
;i< Items +elating to 2mall 2cale 2ector ;1' entries<
;5< =iscellaneous Items ;1! entries<
;k< 2#ecial ,ategories ;2 entries<
:lso4 eig3t categories of items like Fertili9ers4 Petroleum Products4 %di*le Oils etc.
im#orted only *y -esignated ,anali9ing :gencies like 2T,4 ==T,4 IO, etc. *ut for
w3ic3 t3e o"t. could grant licenses to ot3ers to im#ort.
Duty Free Import Authorization Scheme - DFIA
T3e new -FI: sc3eme is a com*ination of :d"ance aut3ori9ation and -F+,. Ender t3e
new -FI: sc3eme all t3e duties are e&em#ted. T3is can *e eit3er #ost e&#ort sc3eme or
t3e in#uts can *e im#orted and utilised for #roduction. Like -F+, t3e in#uts and finis3ed
#roducts are freely transfera*le wit3 t3e condition t3at suc3 transfers s3ould *e affected on
#ayment of additional duties.
T3e minimum "alue addition to *e ac3ie"ed under t3e new -FI: sc3eme is 2@H as
com#ared to 2!H under t3e erstw3ile -F+, sc3eme. T3is facility of -FI: is a"aila*le
only for t3e #roducts w3ic3 3a"e 2IOA. Ender t3is sc3eme4 an e&#orter w3o wis3es to
e&#ort under -FI: sc3eme s3ould a##ly *efore 3e affects suc3 e&#orts and #ro"ide t3e
a##lication reference in e&#ort documents. He can use 3is duty #aid in#uts and later
re#lenis3 after su*se6uently im#orting t3e same. He need not #ay any duty on suc3
im#orts
Enlike -F+, w3ere 3e was re6uired to #ay :dditional duty of customs.
If t3e e&#orter wis3es to use t3e same for furt3er #roduction4 3e can do so4 or 3e can
transfer eit3er in#ut as suc3 or finis3ed #roduct on #ayment of a##lica*le duties. :s wit3
-F+,4 ne&us condition B*ut *roader in nature B is ke#t for some e&#ort #roducts also.
Import for 1obbing
=any e&#orters could get orders for 5o**ing i.e. t3e foreign *uyer su##lies all or most of
t3e in#uts or e"en moulds4 5igs4 fi&tures etc.4 re6uired for making t3e end #roduct on 5o*7
work *asis and #ays only t3e 5o*7work c3arges to t3e manufacturer. 2uc3 im#orts 3ad to
*e made duty free against an e&#ort o*ligation *ut as no #ayments were in"ol"ed for t3e
"alue of in#uts or for t3e "alue of t3e e&#ort #roducts4 t3e ?(:L sc3eme was not 6uite
a##ro#riate. 2o4 t3e o"t. maintained a sc3eme of :d"ance ,ustoms ,learance Permits
;:,,P< under w3ic3 t3e re6uisite in#uts4 moulds etc. could *e im#orted duty free against
o*ligation to e&#ort t3e resultant #roducts and ac3ie"e t3e 1@H "alue addition. :,,P was
a*olis3ed in 1//! and t3e sc3eme is *eing administered under a ,ustoms %&em#tion
Aotification 328/).
Ender t3e ,ustoms %&em#tion Aotification no. 328/)4 5o**ing 3as *ecome muc3 sim#ler.
T3ere is no need for a licence. T3e manufacturer 3as to a##roac3 3is 5urisdictional ,entral
%&cise aut3orities4 take a s#ecial registration and e&ecute a *ond and make an a##lication
to allow t3e duty e&em#tion on materials t3at t3e foreign su##lier sends free of c3arge. On
t3e *asis of t3e *ond and a##lication4 t3e ,.%&. :ut3orities issue an Im#ort Procurement
,ertificate ;IP,<. On t3e *asis of t3e IP,4 t3e ,ustoms allow t3e duty e&em#tion. T3e
manufacturer 5o**er 3as to e&#ort t3e manufactured goods and gi"e necessary #roof to t3e
,.%&. :ut3orities.
Import of Spares
%arlier4 t3ere was a limit of 1@H on im#ort of s#ares. Aow t3at limit 3as *een wit3drawn.
2#ares can *e im#orted u#to any "alue wit3in t3e %P, licence "alue. =oreo"er4 e"en
s#ares for e&isting mac3inery can *e im#orted under %P, sc3eme. 2#ares can *e
im#orted anytime wit3in t3e "alidity of t3e licence. T3e ca#ital goods 3a"e to *e im#orted
wit3in 24 mont3s from t3e date of issue of licence. T3e usual rela&ations for "alidity of
licences will *e a"aila*le for %P, licences also.
%P, licence sc3eme 3as *een li*erali9ed so muc3 t3at t3e o"ernment e&#ects to *ring
down t3e cost of setting u# a #ro5ect su*stantially. T3is is e&#ected to ena*le e"en small
entre#reneurs get second 3and ca#ital goods at 3H duty. T3e o"ernment e&#ects
su*stantial *oost to industrial and economic acti"ity t3roug3 t3e %P, sc3eme.
In Canuary 2@@44 t3e o"ernment 3as furt3er li*erali9ed t3e %P, sc3eme *y allowing
e&#orts *y grou# com#anies to disc3arge t3e e&#ort o*ligation. T3e %P, committees at
"arious licensing offices 3a"e *een a*olis3ed. +egional Licensing :ut3orities can grant
licences u# to +s. !@ ,rore against a ,3artered %ngineer0s certificate. T3e %P,
committee at t3e -FT0s office will consider a##lications for licenses for 3ig3er "alue.
Imports allowed
:n %OE can im#ort ca#ital goods4 raw materials etc. wit3out im#ort duty #ayment. T3e
goods manufactured *y an %OE are su*5ect to e&cise duty. T3e e&cise duty is e&em#ted4 if
t3egoods are e&#orted. Howe"er4 if t3e goods are sold in -T:4 e&cise duty is le"ia*le. To
a"ail duty e&em#tion4 it is essential t3at t3e final #roduct *e not e&em#ted. Ot3erwise4
t3ere will *e no duty e&em#tion a"aila*le under %OE 2c3eme.
Banking and finance
The Indian money market is classified into the organised sector,
comprising private, public and foreign owned commercial banks
and cooperative banks, together known as scheduled banks, and
the unorganised sector, which includes individual or family owned
indigenous bankers or money lenders and non-banking financial
companies.
[9!
The unorganised sector and microcredit are still
preferred over traditional banks in rural and sub-urban areas,
especially for non-productive purposes, like ceremonies and short
duration loans.
[99!
"rime #inister Indira $andhi nationalised %& banks in %9'9,
followed by si( others in %9), and made it mandatory for banks
to provide &)* of their net credit to priority sectors like
agriculture, small-scale industry, retail trade, small businesses,
etc. to ensure that the banks fulfill their social and developmental
goals. +ince then, the number of bank branches has increased
from ,,') in %9'9 to -,,%-) in ,))- and the population covered
by a branch decreased from '.,)) to %/,))) during the same
period. The total bank deposits increased from /9.% billion
01+29&) million3 in %9-)4-% to ..)9.,, billion 01+2'%) billion3
in ,))4)9. 5espite an increase of rural branches, from %,') or
,,* of the total number of branches in %9'9 to .),/9) or &,* in
,))-, only .,,,-) out of /)),))) villages are covered by a
scheduled bank.
[%))![%)%!
India6s gross domestic saving in ,))'4)- as a percentage of $5"
stood at a high .,.*.
[%),!
#ore than half of personal savings are
invested in physical assets such as land, houses, cattle, and gold.
[%).!
The public sector banks hold over -/* of total assets of the
banking industry, with the private and foreign banks holding
%.,* and './* respectively.
[%)&!
+ince liberalisation, the
government has approved significant banking reforms. 7hile
some of these relate to nationalised banks, like encouraging
mergers, reducing government interference and increasing
profitability and competitiveness, other reforms have opened up
the banking and insurance sectors to private and foreign players.
[-![%)/!
External trade and investment
Global trade relations

: ma# s3owing t3e glo*al distri*ution of Indian e&#orts in 2@@' as a #ercentage of t3e to# market
;E2: B D2@4/@24!@@4@@@<.
Entil t3e li*eralisation of 1//14 India was largely and intentionally isolated from t3e world
markets4 to #rotect its economy and to ac3ie"e self7reliance. Foreign trade was su*5ect to
im#ort tariffs4 e&#ort ta&es and 6uantitati"e restrictions4 w3ile foreign direct in"estment
;F-I< was restricted *y u##er7limit e6uity #artici#ation4 restrictions on tec3nology
transfer4 e&#ort o*ligations and go"ernment a##ro"alsJ t3ese a##ro"als were needed for
nearly '@H of new F-I in t3e industrial sector. T3e restrictions ensured t3at F-I a"eraged
only around D2@@ million annually *etween 1/.! and 1//1J a large #ercentage of t3e
ca#ital flows consisted of foreign aid4 commercial *orrowing and de#osits of non7resident
Indians.

IndiaKs e&#orts were stagnant for t3e first 1! years after inde#endence4 due to
general neglect of trade #olicy *y t3e go"ernment of t3at #eriod. Im#orts in t3e same
#eriod4 due to industrialisation *eing nascent4 consisted #redominantly of mac3inery4 raw
materials and consumer goods.
ra#3ical de#iction of IndiaKs #roduct e&#orts in 2. color7
coded categories.
2ince li*eralisation4 t3e "alue of IndiaKs international
trade 3as increased s3ar#ly4 wit3 t3e contri*ution of total
trade in goods and ser"ices to t3e -P rising from 1'H
in 1//@B/1 to 4)H in 2@@.B1@. India accounts for 1.44H
of e&#orts and 2.12H of im#orts for merc3andise trade
and 3.34H of e&#orts and 3.31H of im#orts for
commercial ser"ices trade worldwide. IndiaKs ma5or trading #artners are t3e %uro#ean
Enion4 ,3ina4 t3e Enited 2tates of :merica and t3e Enited :ra* %mirates. In 2@@'B@)4
ma5or e&#ort commodities included engineering goods4 #etroleum #roducts4 c3emicals and
#3armaceuticals4 gems and 5ewellery4 te&tiles and garments4 agricultural #roducts4 iron ore
and ot3er minerals. =a5or im#ort commodities included crude oil and related #roducts4
mac3inery4 electronic goods4 gold and sil"er. In Ao"em*er 2@1@4 e&#orts increased 22.3H
year7on7year to .!@.'3 *illion ;E2D14 *illion<4 w3ile im#orts were u# ).!H at 12!1.33
*illion ;E2D2@ *illion<. Trade deficit for t3e same mont3 dro##ed from 4'..'! *illion
;E2D).! *illion< in 2@@/ to 4@@.) *illion ;E2D'.4 *illion< in 2@1@.
India is a founding7mem*er of eneral :greement on Tariffs and Trade ;:TT< since
1/4) and its successor4 t3e 1TO. 13ile #artici#ating acti"ely in its general council
meetings4 India 3as *een crucial in "oicing t3e concerns of t3e de"elo#ing world. For
instance4 India 3as continued its o##osition to t3e inclusion of suc3 matters as la*our and
en"ironment issues and ot3er non7tariff *arriers to trade into t3e 1TO #olicies.
Balance of payments
,umulati"e ,urrent :ccount (alance 1/.@B2@@. *ased on I=F data
2ince inde#endence4 IndiaKs *alance of #ayments on its current account 3as *een negati"e.
2ince economic li*eralisation in t3e 1//@s4 #reci#itated *y a *alance of #ayment crisis4
IndiaKs e&#orts rose consistently4 co"ering .@.3H of its im#orts in 2@@2B@34 u# from
''.2H in 1//@B/1.
L131M
Howe"er4 t3e glo*al economic slum# followed *y a general
deceleration in world trade saw t3e e&#orts as a #ercentage of im#orts dro# to '1.4H in
2@@.B@/.
L132M
IndiaKs growing oil im#ort *ill is seen as t3e main dri"er *e3ind t3e large
current account deficit4
L1@'M
w3ic3 rose to D11..) *illion4 or /.)H of -P4 in 2@@.B@/.
L133M

(etween Canuary and Octo*er 2@1@4 India im#orted D.2.1 *illion wort3 of crude oil.
L1@'M
-ue to t3e glo*al late72@@@s recession4 *ot3 Indian e&#orts and im#orts declined *y 2/.2H
and 3/.2H res#ecti"ely in Cune 2@@/.
L134M
T3e stee# decline was *ecause countries 3it
3ardest *y t3e glo*al recession4 suc3 as Enited 2tates and mem*ers of t3e %uro#ean
Enion4 account for more t3an '@H of Indian e&#orts.
L13!M
Howe"er4 since t3e decline in
im#orts was muc3 s3ar#er com#ared to t3e decline in e&#orts4 IndiaKs trade deficit reduced
to 2!2.! *illion ;E2D4.@ *illion<.
L134M
:s of Cune 2@114 e&#orts and im#orts 3a"e *ot3
registered im#ressi"e growt3 wit3 mont3ly e&#orts reac3ing D2!./ *illion for t3e mont3 of
=ay 2@11 and mont3ly im#orts reac3ing D4@./ *illion for t3e same mont3. T3is re#resents
a year on year growt3 of !'./H for e&#orts and !4.1H for im#orts.
L22M
IndiaKs reliance on e&ternal assistance and concessional de*t 3as decreased since
li*eralisation of t3e economy4 and t3e de*t ser"ice ratio decreased from 3!.3H in 1//@B/1
to 4.4H in 2@@.B@/.
L13'M
In India4 %&ternal ,ommercial (orrowings ;%,(s<4 or
commercial loans from non7resident lenders4 are *eing #ermitted *y t3e o"ernment for
#ro"iding an additional source of funds to Indian cor#orates. T3e =inistry of Finance
monitors and regulates t3em t3roug3 %,( #olicy guidelines issued *y t3e +eser"e (ank
of India under t3e Foreign %&c3ange =anagement :ct of 1///.
L13)M
IndiaKs foreign
e&c3ange reser"es 3a"e steadily risen from D!.. *illion in =arc3 1//1 to D2.3.! *illion in
-ecem*er 2@@/.
L13.M
Foreign direct investment
See also Foreign direct investment, India section.
Share of top five investing countries in FDI inflows. (20002010)
[13!
Rank Country
Inflows
(million USD)
Inflows ()
1 =auritius !@41'4 42.@@
2 2inga#ore 1142)! /.@@
3 E2: .4/14 ).@@
4 EN '41!. !.@@
! Aet3erlands 44/'. 4.@@
:s t3e t3ird7largest economy in t3e world in PPP terms4 India is a #referred destination for
F-IJ
L14@M
-uring t3e year 2@114 F-I inflow into India stood at D3'.! *illion4 !1.1H 3ig3er
t3an 2@1@ figure of D24.1! *illion. India 3as strengt3s in telecommunication4 information
tec3nology and ot3er significant areas suc3 as auto com#onents4 c3emicals4 a##arels4
#3armaceuticals4 and 5ewellery. -es#ite a surge in foreign in"estments4 rigid F-I
L141M

#olicies were a significant 3indrance. Howe"er4 due to #ositi"e economic reforms aimed
at deregulating t3e economy and stimulating foreign in"estment4 India 3as #ositioned
itself as one of t3e front7runners of t3e ra#idly growing :sia7Pacific region.
L14@M
India 3as a
large #ool of skilled managerial and tec3nical e&#ertise. T3e si9e of t3e middle7class
#o#ulation stands at 3@@ million and re#resents a growing consumer market.
L142M
-uring 2@@@B1@4 t3e country attracted D1). *illion as F-I.
L143M
T3e inordinately 3ig3
in"estment from =auritius is due to routing of international funds t3roug3 t3e country
gi"en significant ta& ad"antagesJ dou*le ta&ation is a"oided due to a ta& treaty *etween
India and =auritius4 and =auritius is a ca#ital gains ta& 3a"en4 effecti"ely creating a 9ero7
ta&ation F-I c3annel.
L144M
IndiaKs recently li*eralised F-I #olicy ;2@@!< allows u# to a 1@@H F-I stake in "entures.
Industrial #olicy reforms 3a"e su*stantially reduced industrial licensing re6uirements4
remo"ed restrictions on e&#ansion and facilitated easy access to foreign tec3nology and
foreign direct in"estment F-I. T3e u#ward mo"ing growt3 cur"e of t3e real7estate sector
owes some credit to a *ooming economy and li*eralised F-I regime. In =arc3 2@@!4 t3e
go"ernment amended t3e rules to allow 1@@H F-I in t3e construction sector4 including
*uilt7u# infrastructure and construction de"elo#ment #ro5ects com#rising 3ousing4
commercial #remises4 3os#itals4 educational institutions4 recreational facilities4 and city7
and regional7le"el infrastructure.
L14!M
-es#ite a num*er of c3anges in t3e F-I #olicy to
remo"e ca#s in most sectors4 t3ere still remains an unfinis3ed agenda of #ermitting greater
F-I in #olitically sensiti"e areas suc3 as insurance and retailing. T3e total F-I e6uity
inflow into India in 2@@.B@/ stood at 122/.1/ *illion ;E2D2@ *illion<4 a growt3 of 2!H
in ru#ee terms o"er t3e #re"ious #eriod.
L14'M
. IndiaKs trade and *usiness sector 3as grown
fast. India currently accounts for 1.!H of world trade as of 2@@) according to t3e 1orld
Trade 2tatistics of t3e 1TO in 2@@'.
Currency
T3e +(IKs new 3ead6uarters in =um*ai
=ain articlesG Indian ru#ee and +eser"e (ank of India
T3e Indian ru#ee ; < is t3e only legal tender in India4 and is also acce#ted as legal tender
in t3e neig3*ouring Ae#al and (3utan4 *ot3 of w3ic3 #eg t3eir currency to t3at of t3e
Indian ru#ee. T3e ru#ee is di"ided into 1@@ #aise. T3e 3ig3est7denomination *anknote is
t3e 14@@@ noteJ t3e lowest7denomination coin in circulation is t3e !@ #aise coinJ
L14)M
wit3
effect from 3@ Cune 2@11 all denominations *elow !@ #aise 3a"e ceased to *e legal
currency.
L14.ML14/M
IndiaKs monetary system is managed *y t3e +eser"e (ank of India ;+(I<4
t3e countryKs central *ank.
L1!@M
%sta*lis3ed on 1 :#ril 1/3! and nationalised in 1/4/4 t3e
+(I ser"es as t3e nationKs monetary aut3ority4 regulator and su#er"isor of t3e monetary
system4 *anker to t3e go"ernment4 custodian of foreign e&c3ange reser"es4 and as an
issuer of currency. It is go"erned *y a central *oard of directors4 3eaded *y a go"ernor
w3o is a##ointed *y t3e o"ernment of India.
L1!1M
T3e ru#ee was linked to t3e (ritis3 #ound from 1/2) to 1/4' and t3en t3e E.2. dollar till
1/)! t3roug3 a fi&ed e&c3ange rate. It was de"alued in 2e#tem*er 1/)! and t3e system of
fi&ed #ar rate was re#laced wit3 a *asket of four ma5or international currencies B t3e
(ritis3 #ound4 t3e E.2. dollar4 t3e Ca#anese yen and t3e -eutsc3e mark.
L1!2M
From 2@@3 to
2@@.4 t3e ru#ee a##reciated against t3e E.2. dollarJ t3ereafter4 it 3as s3ar#ly de#reciated.
(etween 2@1@ and 2@124 t3e ru#ee "alue 3ad de#reciated *y a*out 3@H of its "alue to t3e
E.2. dollar in 2@1@.
L1!3M
Income and consumption
=ain articleG Income in India
1orld ma# s3owing t3e ini coefficient4 a measure of income ine6uality. India 3as a ini
coefficient of @.3'..
IndiaKs gross national income #er ca#ita 3ad e&#erienced 3ig3 growt3 rates since 2@@2.
IndiaKs Per ,a#ita Income 3as tri#led from +s. 1/4@4@ in 2@@2B@3 to +s. !34331 in 2@1@B
114 a"eraging 13.)H growt3 o"er t3ese eig3t years #eaking 1!.'H in 2@1@B11.
L1!4M

Howe"er growt3 in t3e inflation ad5usted Per ca#ita income of t3e nation slowed to !.'H
in 2@1@B114 down from '.4H in t3e #re"ious year. :s of 2@1@4 according to 1orld (ank
statistics4 a*out 4@@ million #eo#le in India4 as com#ared to 1.2/ *illion #eo#le
worldwide4 li"e on less t3an D1.2! ;PPP< #er day. T3ese consum#tion le"els are on an
indi"idual *asis4 not 3ouse3old.
L1!!M
Per 2@11 census4 India 3as a*out 33@ million 3ouses and 24) million 3ouse3olds. T3e
3ouse3old si9e in India 3as dro##ed in recent years4 wit3 2@11 census re#orting !@H of
3ouse3olds 3a"e 4 or less mem*ers. 2ome 3ouse3olds 3a"e ' or more mem*ers4 including
t3e grand#arents.
L1!'ML1!)ML1!.M
T3ese 3ouse3olds #roduced a -P of a*out D1.) Trillion.
L1!/M

T3e 3ouse3old consum#tion #atterns #er 2@11 censusG a*out ') #ercent of 3ouse3olds use
firewood4 cro# residue or cow dung cakes for cooking #ur#osesJ !3 #ercent do not 3a"e
sanitation or drainage facilities on #remisesJ .3 #ercent 3a"e water su##ly wit3in t3eir
#remises or 1@@ metres from t3eir 3ouse in ur*an areas and !@@ metres from t3e 3ouse in
rural areasJ ') #ercent of t3e 3ouse3olds 3a"e access to electricityJ '3 #ercent of
3ouse3olds 3a"e landline or mo*ile tele#3one conne&ionJ 43 #ercent 3a"e a tele"isionJ 2'
#ercent 3a"e eit3er a two w3eel ;motorcycle< or four w3eel ;car< "e3icle. ,om#ared to
2@@14 t3ese income and consum#tion trends re#resent moderate to significant
im#ro"ements.
L1!'ML1!)M
One re#ort in 2@1@ claimed t3at t3e num*er of 3ig3 income
3ouse3olds 3as crossed lower income 3ouse3olds.
L1'@M
AI #er ca#itaG
India ;141)@ D<
Hig3er AI #er ca#ita com#ared to India
Lower AI #er ca#ita com#ared to India
India 3as a*out '1 million c3ildren under t3e age of ! w3o are c3ronically malnouris3ed4
com#ared to 1!@ million c3ildren worldwide. =a5ority of malnouris3ed c3ildren of India
li"e in rural areas. irls tend to *e more malnouris3ed t3an *oys. =alnouris3ment4 claims
t3is re#ort4 is not a matter of income4 rat3er it is education as in ot3er #arts of t3e world. :
t3ird of c3ildren from t3e wealt3iest fift3 of IndiaKs #o#ulation are malnouris3ed. T3is is
*ecause of #oor feeding #ractices B foremost among t3em a failure e&clusi"ely to
*reastfeed in t3e first si& mont3s B #lay as *ig a role in IndiaKs malnutrition rates as food
s3ortages. IndiaKs go"ernment 3as launc3ed se"eral ma5or #rograms wit3 mandated social
s#ending #rograms to address c3ild malnouris3ment #ro*lem. Howe"er4 Indian
go"ernment 3as largely failed. : #u*lic distri*ution system t3at targets su*sidised food to
t3e #oor and a "ast midday7meal sc3eme4 to w3ic3 12@ million c3ildren su*scri*e >are
3am#ered *y inefficiency and corru#tion
Lcitation neededM
. :not3er go"ernment7#aid #rogram
named Integrated ,3ild3ood -e"elo#ment 2er"ice ;I,-2< 3as *een o#erating since 1/)!
and it too 3as *een ineffecti"e and a wasteful #rogram.
L1'1M
: 2@11 EAI,%F re#ort claims
recent encouraging signs. (etween 1//@ to 2@1@4 India 3as ac3ie"ed a 4! #ercent
reduction in under age ! mortality rates4 and now ranks 4' in 1.. countries on t3is metric.
L1'2M
Import duty & taxes when importing into India
Overview
Im#ort duty and ta&es are due w3en im#orting goods into India w3et3er *y a #ri"ate
indi"idual or a commercial entity. T3e "aluation met3od is ,IF ;,ost4 Insurance and
Freig3t<4 w3ic3 means t3at t3e im#ort duty and ta&es #aya*le are calculated on t3e
com#lete s3i##ing "alue4 w3ic3 includes t3e cost of t3e im#orted goods4 t3e cost of
freig3t4 and t3e cost of insurance. -uty in #articular is calculated on t3e sum of t3e ,IF
"alue and landing c3arges ;e&#lained *elow<. 2ome duties are also *ased on 6uantity
measurements. In addition to duty4 im#orts are su*5ect to ot3er ta&es and c3arges suc3 as
landing c3arges4 counter"ailing duty4 ,%224 and education ,%22.
Duty Rates
-uty rates in India can *e ad "alorem ;as a #ercentage of "alue< or s#ecific ;ru#ees #er
unit<. -uty rates "ary from @H to 1!@H4 wit3 an a"erage duty rate of 11./H. 2ome
goods are not su*5ect to duty ;e.g. la#to#s and ot3er electronic #roducts<.
Sales Tax
T3ere is no sales ta& in India for im#orted goods.
Minimum thresholds
T3ere is no minimum t3res3old in India4 i.e. all im#orts regardless of t3eir "alue are
su*5ect to duty and ta&es.
Other taxes and custom fees
Landing c3argesG ;1H ,IF<
,ounter"ailing duty ;,F-<G ;@H4 'H or 12H ;,IF- O Landing c3arges<<
,%22 ;%ducation O Hig3er %ducation<G 3H ;-uty O ,ounter"ailing duty<
:dditional ,F-G 4H ;,IF- O Landing c3arges O ,ounter"ailing duty O ,%22<

Local Customs office and contacts
=ore information on im#ort declaration #rocedures and im#ort restrictions can *e found at
t3e Indian ,ustoms we*site.
Composition of India's Imports
In 1/4)74. t3e main items of IndiaKs im#orts were mac3ineries4 oil4 grains4 cotton4 cutlery4
3ardware im#lements4 c3emicals4 etc. T3ey constituted )@H of IndiaKs im#orts. :fter t3at
due to t3e em#3asis on industrialisation during t3e second !7Iear #lan necessitated t3e
im#orts of ca#ital goods.
Aow im#orts of IndiaKs are *roadly classified into following four categories.
Ta*le *elow s3ows com#osition of IndiaKs im#ort from 1//@7/1 to 2@@!7@'.
India Imports
Imports in India increased to 2277.60 INR Billion in
1uly of 2013 from 2104.33 INR Billion in 1une of 2013.
Imports in India is reported by the Directorate General
of Commerce. India Imports averaged 373.09 INR
Billion from 1978 until 2013, reaching an all time high of
2475.94 INR Billion in 1anuary of 2013 and a record low
of 4.98 INR Billion in April of 1978. India is heavily
dependent on coal and foreign oil imports for its energy
needs. Other imported products include: machinery,
gems, fertilizers and chemicals. India`s main import
partners are China (12 percent of total imports), United
Arab Emirates, Switzerland, Saudi Arabia, United
States, Iraq and Kuwait. This page contains - India
Imports - actual values, historical data, forecast, chart,
statistics, economic calendar and news. 2013-08-27
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Im#orts Q Aotes
:n im#ort is any good or ser"ice *roug3t into one country from anot3er country in a
legitimate fas3ion4 ty#ically for use in trade. Im#ort goods or ser"ices are #ro"ided to
domestic consumers *y foreign #roducers. :n im#ort in t3e recei"ing country is an e&#ort
to t3e sending country. Im#ort of goods normally re6uires in"ol"ement of t3e ,ustoms
aut3orities in *ot3 t3e country of im#ort and t3e country of e&#ort and is often su*5ect to
im#ort 6uotas4 tariffs and trade agreements.
TRENDS IN INDIA'S FOREIGN TRADE
Trade Performance
%&#orts crossed t3e landmark figure of E2 D 1@@ *illion to reac3 E2 D 1@3 *illion during
2@@!7@'. -uring t3e current year 2@@'7@) e&#orts are e&#ected to reac3 t3e target of E2 D
12! *illion if t3e #resent rate of growt3 of e&#orts is maintained during t3e last 6uarter of
t3e year. T3e sustained growt3 of merc3andise e&#orts at more t3an 2@ #er cent during t3e
last few years is more t3an twice t3e growt3 of ross -omestic Product ;-P<. If t3is
trend continues t3e e&#ort target of E2 D 1!@ *illion set in t3e Foreign Trade Policy for
2@@/ is likely to *e ac3ie"ed 6uite comforta*ly as can *e seenat Box 2.1.
T3e growt3 #erformance of e&#orts 3as *een an outcome of a conscious and concerted
effort on t3e #art of t3e o"ernment to *ring down transaction costs and facilitate trade.
T3e "ision and t3e roadma# #ro"ided *y t3e Foreign Trade Policy ;2@@47@/< for a fi"e year
#eriod wit3 clearly enunciated o*5ecti"es4 strategies and #olicy initiati"es 3as *een
instrumental in #utting e&#orts on a 3ig3er growt3 tra5ectory.
T3e e&#ort target during 2@@47@! at around E2 D )! *illion was soug3t to *e dou*led to
E2 D 1!@ *illion *y t3e terminal year of t3e Foreign Trade Policy4 i.e. 2@@.7@/. For t3e
first time in t3e 3istory of #lanning dou*ling of e&#orts in less t3an fi"e years is *eing seen
as an ac3ie"a*le target. 13at is e"en more significant is t3at e&#orts 3a"e *een concei"ed
of as an engine for generating additional economic acti"ity for em#loyment generation
wit3 s#ecial focus on rural and semi7ur*an areas.
%&#orts are #ro5ected to touc3 t3e target of E2 D 12! *illion *y t3e end of t3e current
financial year 2@@'7@) if t3e #resent rate of growt3 is maintained during t3e last 6uarter of
t3e year.T3e e&#ort growt3 in India is #artly on account of a fa"oura*le international
en"ironment resulting from a sustained world -P growt3 at around ! #er cent since 2@@3.
T3is 3as led to *ooming trade "olumes and rising commodity #rices in t3e world market.
Howe"er4 t3is alone does not entirely e&#lain t3e 2!@
un#recedented growt3 #erformance. %&#orts from India also res#onded to numerous
reform measures and #olicy initiati"es. T3e o"ernment made a conscious and concerted
effort to reduce trade *arriers4 *ring down transaction costs and facilitate trade. For t3e first
time in t3e 3istory of #lanning dou*ling of e&#ort acti"ity wit3in fi"e years was set as a
concrete target of t3e Foreign Trade Policy of t3e o"ernment. -uring t3e first nine
mont3s of t3e current financial year ; :#ril 7 -ecem*er 2@@'7@)< e&#orts stood at E2 D ./
*illion w3ile im#orts were "alued at E2 D 131 *illion. Trade deficit was estimated at E2 D
42 *illion. T3e aggregate foreign trade data in E2 -ollar and +u#ee terms for t3e #eriod
:#ril7 -ecem*er 2@@!7@' and :#ril7 -ecem*er 2@@'7@) are gi"en *elow in Ta*le 2.1.
Trade Balance
T3e Trade deficit in 2@11712 ;:#r7-ec< was estimated at E2 D 133.2) *illion w3ic3 was
3ig3er t3an t3e deficit of E2 D /'.21 *illion during 2@1@711 ;:#r7-ec<. Performance of
%&#orts4 Im#orts and (alance of Trade during 2@@47@! to 2@11712 ;:#ril7-ec< is gi"en in
t3e ta*le *elowG
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Chart 2.2
Month-wise Growth during 2011-12 (April-Dec) over 2010-11 (April-
Dec)
World Trade Scenario
:s #er I=F0s 1orld %conomic Outlook Octo*er4 2@114 world trade recorded its largest
e"er annual increase in 2@1@4 as merc3andise e&#orts surged 14.4 #er cent. T3e "olume of
world trade ;goods and ser"ices< in 2@11 is e&#ected to slow down to ).! #er cent
com#ared to t3e 12.. #er cent ac3ie"ed in 2@1@. rowt3 in t3e "olume of world trade is
e&#ected to decline in 2@12 to !.. #er cent as #er I=F #ro5ections.
T3e I=F 3as moderated its growt3 #ro5ections of world out#ut to 4 #er cent in 2@12. T3e
ad"anced economies are e&#ected to grow at 1./ #er cent in 2@12 w3ile t3e emerging and
de"elo#ing economies to grow at '.1 #er cent. T3e #ro5ected growt3 rates in different
countries are e&#ected to determine t3e markets for our e&#orts.
:s #er 1TO0s International Trade 2tatistics4 2@1@4 in merc3andise trade4 India is t3e 2@t3
largest e&#orter in t3e world wit3 a s3are of 1.4 #er cent and t3e 13t3 largest im#orter wit3
a s3are of 2.1 #er cent in 2@1@.
T3e year 2@11 3as *een a difficult year wit3 Ca#an facing a ma5or eart36uake and tsunami4
t3e swelling of unrest in t3e =iddle %ast oil #roducing countries4 t3e slowing down of E2
economy and t3e %uro area facing ma5or financial tur*ulence. T3e current glo*al
economic slowdown 3as its e#icenter in t3e %uro7region *ut t3e contagion is *eing
witnessed in all ma5or economies of t3e world. :s a result4 India0s s3ort7term growt3
#ros#ects 3a"e also *een im#acted.

Im#ort of 2ensiti"e Items during :#ril @/7 2e#tem*er @/
T3e total im#ort of sensiti"e items for t3e #eriod :#ril72e#tem*er 2@@/71@ 3as *een
+s.2/2!'.2/ crore as com#ared to +s.211.'.'1 crore during t3e corres#onding #eriod of
last year t3ere*y s3owing an increase of 3..1H. T3e gross im#ort of all commodities
during same #eriod of current year was +s.)/@'44 crore as com#ared to +s '@!@)! crore
during t3e same #eriod of last year. T3us im#ort of sensiti"e items constitutes 2.)H and
4..H of t3e gross im#orts during last year and current year res#ecti"ely. T3e summary of
im#ort of 2ensiti"e items is gi"en in t3e Ta*le 2.'.
Im#orts of automo*iles4 cotton $ silk4 #roducts of 22I alco3olic *e"erages and food
grains 3a"e s3own a decline at *road grou# le"el during t3e #eriod. Im#orts of all ot3er
items "i9. edi*le oil4 Pulses4 fruits $ "egeta*les ;including nuts<4 ru**er4 s#ices4 mar*le $
granite4 tea $ coffee and milk $ milk #roducts 3a"e s3own increase during t3e #eriod
under reference.
In t3e edi*le oil segment4 t3e im#ort 3as increased from +s '2'!.'/ crore last year to +s
11.31.43 crore for t3e corres#onding #eriod of t3is year. T3e im#orts of *ot3 crude edi*le
oil as well as refined oil 3a"e gone u# *y /)H and !!H res#ecti"ely. T3e increase in
edi*le oil im#ort is mainly due to su*stantial increase in im#ort of crude #alm oil and its
fractions.
Im#orts of sensiti"e items from Indonesia4 =yanmar4 (ra9il4 =alaysia4 Enited 2tates of
:merica4 Ca#an4 ,anada4 Ekraine4 :rgentina4 :ustralia4 (enin4 uinea (issau etc. 3a"e
gone u# w3ile t3ose from ,3ina P +P4 Norea +P4 ermany4 T3ailand4 ,ote -0 I"oire4
,9ec3 +e#u*lic etc. 3a"e s3own a decrease.

Imports by Principal Commodities
-isaggregated data on im#orts *y #rinci#al commodities4 *ot3 in +u#ee and
-ollar terms4 a"aila*le for t3e #eriod 2@11712 ;:#rilB Octo*er<4 as com#ared to
t3e corres#onding #eriod of t3e #re"ious year are gi"en in Ta*le 2.! and Ta*le
2.' res#ecti"ely. Im#orts of t3e to# fi"e commodities during t3e #eriod 2@11712
;:#ril7Octo*er< registered a s3are of '2.. #er cent mainly due to significant
im#orts of Petroleum ;,rude $ Products<4 old4 %lectronic oods4 Pearls4
#recious and semi7#recious stones and =ac3inery e&ce#t electrical and
electronic.
T3e s3are of to# fi"e Princi#al ,ommodity in India0s total im#orts during 2@117
12 ;:#rilB Octo*er< is gi"en at ,3art 2.! *elowG
Chart 2.5
Share of Top Five Principal Commodities in India`s Imports
2011-12 (April-October)
T3e im#ort #erformance *y growt3 of to# fi"e Princi#al commodities during
2@11712 ;:#rilB Octo*er< "is7a7"is t3e corres#onding #eriod of t3e #re"ious year
is s3own at ,3art 2.'.
Chart 2.6
Top Five Commodities of Import by Growth 2009-10 & 2010-11
to E2 D /.)@.14 million from E2 D '!)@.@) million during t3e same #eriod of
last year4 registering a growt3 of !@.23 #er cent.
Gold & Silver
-uring 2@11712 ;:#rilB Octo*er< im#ort of old and 2il"er increased to E2 D
3..1)..1 million from E2 D 2332@.3/ million during t3e corres#onding #eriod of
t3e #re"ious year registering a growt3 of ''.4! #er cent.
Direction of India`s Foreign Trade
T3e "alue of India0s e&#orts and im#orts from ma5or regions8 countries *ot3 in
+u#ee and -ollar terms are gi"en in Ta*le 2.34 2.44 2.) and 2.. res#ecti"ely.
23are of ma5or destinations of India0s %&#orts and sources of Im#orts during
2@11712 ;:#rilB Octo*er< are gi"en in ,3art 2.) and 2.. res#ecti"ely.
Chart 2.7
Major Destinations of India`s Exports for 2011-12 (April-
October)
-uring t3e #eriod 2@11712 ;:#rilB Octo*er<4 t3e s3are of :sia and :2%:A
region com#rising 2out3 :sia4 %ast :sia4 =id7%astern and ulf countries
accounted for !@.'/ #er cent of India0s total e&#orts. T3e s3are of %uro#e and
:merica in India0s e&#orts stood at 1/.)3 #er cent and 1'.'. #er cent res#ecti"ely
of w3ic3 %E countries ;2)< com#rises 1)..1 #er cent. -uring t3e #eriod4 Enited
:ra* %mirates ;11..2 #er cent< 3as *een t3e most im#ortant country of e&#ort
destination followed *y E2: ;11.!1 #er cent<4 2inga#ore ;'.13 #ercent<4 ,3ina
;!.3!< #er cent<4 Hong Nong ;4.44 #er cent<.
:sia and :2%:A accounted for '1.3' #er cent of India0s total im#orts during t3e
#eriod followed *y %uro#e ;1/.2) #er cent< and :merica ;../2 #er cent<. :mong
indi"idual countries t3e s3are of ,3ina stood 3ig3est at ;12.@@ #er cent< followed
*y E:% ;).!1 #er cent<4 2wit9erland ;).21 #er cent<4 2audi :ra*ia ;'.@' #er
cent<4 E2: ;4.). #er cent< Ira6 ;3..! #er cent<4 ermany ;3.2! #er cent<4 Aigeria
;3.2! #er cent<4 Indonesia ;3.@' #er cent<4 :ustralia ;2./' #er cent<.
Chart 2.8
Major Source of India`s Imports for 2011-12 (April-October)