EMERGING TRENDS IN INDIAS FOREIGN TRADE

STRUCTURE OF PRESENTATION
1. Indian Economy: A Snapshot
2. Merchandise Trade: A Perspective

3. Services Trade: Recent Trends

4. Indias Investment Flows
5. Exim Bank: An Overview
2

INDIA: AN EMERGING ECONOMIC POWERHOUSE

Strong Economic Fundamentals

Worlds 10th largest economy based on nominal GDP in 2013

Worlds 3rd largest economy in terms of purchasing power parity (US$ 5.1 trillion in 2013), after USA and China;
expected to cross US$ 6 trillion by 2016

Recovery in real GDP growth; estimated growth rate of 5.4% - 5.9% in FY 2015 [Union Budget 2014-15]

Favorable demographic profile: 64.8% of the population is in the age group of 15 to 59 years

Stable forex reserves, increased at a CAGR of 7.9% over FY 2005 to FY 2014

Sovereign rating: Baa3/Stable (Moodys), BBB-/Negative (S&P), BBB-/Stable (Fitch)

Ranks 3rd among the most favoured investment destinations in the world (behind China & USA) in UNCTADs
World Investment Prospects 2013-15

JBIC Survey on Overseas Business Operations by Japanese Manufacturing Companies:

Second to China as the most promising country for investment in the long term

Second to Indonesia as the most promising country for investment in the medium term

Source: IMF, World Economic Outlook Database; IIF; UNCTAD World Investment Prospects Survey 20132015

INDIAN ECONOMY SNAPSHOT

PARAMETER

FY 2004

FY 2009

FY 2012

FY 2013

FY 2014

617.3

1224.1

1880.3

1858.7

1877.5

GDP Growth (constant prices, %)

8.5

6.7

6.7

4.5

4.7e

Exports Merchandise (US$ bn)

63.8

185.3

306.0

300.4

312.6

Imports Merchandise (US$ bn)

78.1

303.7

489.3

490.7

450.1

Exports Services (US$ bn)

26.9

106.0

142.3

145.7

151.5

Software Exports (US$ bn)

13.3

46.3

62.2

65.9

69.5

Imports Services (US$ bn)

16.7

52.0

78.2

80.8

78.5

Current Account Balance (US$ bn)

14.1

-28.7

-78.2

-87.8

-32.4

113.0

252.0

294.4

292.0

304.2

FDI Inflows (US$ bn)

4.3

41.9

46.6

34.3

36.0

FDI Outflows* (US$ bn)

1.9

19.4

10.9

7.1

9.2

GDP (current prices, US$ bn)

Forex Reserves (US$ bn) (as on end-March)

Note: e: estimates; * - Actuals

Cumulative value of exports during April-June 2014-15 was US$ 80.1 billion, growing at 9.3% and imports was US$ 113.2 bn, growing at 6.9%
Source: IIF, MOCI, CSO, RBI

INDIAS INTERNATIONAL TRADE

Towards Increased Global Integration through Trade
Exports

Imports

Total Trade

Trade Balance

Indias total merchandise trade increased from US$ 489

bn in FY 2007 to US$ 763 bn in FY 2014

795.3

791.1

762.7

US$ 190 billion in FY 2013

620.9

467.1

Policy measures lead to decline in imports during

2011-12

2012-13

-183.3

-190.3

2008-09

2009-10

-118.4

-109.6

-118.7

312.6
450.1

306.0
489.3

2010-11

178.8
288.4

251.1
369.8

300.4
490.7

FY 2014
185.3
303.7

US$billion

489.0

Fall in Trade deficit to US$ 138 billion in FY2014 from

quarter of FY 2015, to US$ 80.1 billion

The long term policy objective of the Government is to

double Indias share in global trade by 2020

2013-14

-137.5

Exports from India have increased by 9.3% in the first

Share of India in world merchandise export 1.7% in

2013; Rank 19 (up from 26th in 2007)

Source: Ministry of Commerce & Industry, Government of India

INDIAS INTERNATIONAL TRADE

Increasing Trade Intensity Trade-GDP Ratio increased from 36.5% to 51.6%

% of GDP

Indias merchandise trade to GDP ratio

36.5

51.6

increased from 26.6% in 2004-05 to 39.3% in

39.3

2013-14
Merchandise export to GDP ratio increased

26.6
17.0
12.2
8.1

11.8
9.8
6.0

from 11.8% in 2004-05 to 17% in 2013-14

Services trade to GDP ratio increased to

12.2% in 2013-14 from 9.8% in 2004-05

Merchandise Exports % GDP

Services Exports % GDP

Merchandise Trade % GDP

Services Trade % GDP

Total Trade (Merch. + Serv.) % of GDP

Source: RBI and IIF

Services export to GDP ratio stood at 8.1% in

2013-14
6

INDIAS SHARE IN GLOBAL MERCHANDISE EXPORTS

Rankings
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

Country

2005

Country

2007

Country

2010

Country

2012

Country

2013

Global Exports
Germany
USA
China
Japan
France
Netherlands
UK
Italy
Canada
Belgium
Hong Kong
South Korea
Russia
Singapore
Mexico
Chinese Taipei
Spain
Saudi Arabia
Malaysia
Sweden
Switzerland
Austria
Brazil
UAE
Thailand
Australia
India

100.0
9.2
8.6
7.3
5.7
4.4
3.9
3.7
3.6
3.4
3.2
2.8
2.7
2.3
2.2
2.0
1.9
1.8
1.7
1.3
1.2
1.2
1.2
1.1
1.1
1.1
1.0
0.9

Global Exports
Germany
China
USA
Japan
France
Netherlands
Italy
UK
Belgium
Canada
South Korea
Russia
Hong Kong
Singapore
Mexico
Spain
Chinese Taipei
Saudi Arabia
UAE
Malaysia
Switzerland
Sweden
Austria
Brazil
Thailand
India
Australia

100.0
9.4
8.7
8.2
5.1
4.0
3.9
3.6
3.2
3.1
3.0
2.6
2.5
2.5
2.1
1.9
1.8
1.8
1.7
1.3
1.3
1.2
1.2
1.2
1.1
1.1
1.1
1.0

Global Exports
China
USA
Germany
Japan
Netherlands
France
South Korea
Italy
UK
Belgium
Hong Kong
Russia
Canada
Singapore
Mexico
Chinese Taipei
Spain
Saudi Arabia
India
UAE
Australia
Brazil
Malaysia
Switzerland
Thailand
Poland
Sweden

100.0
10.3
8.4
8.2
5.0
3.8
3.4
3.0
2.9
2.7
2.7
2.6
2.6
2.5
2.3
1.9
1.8
1.7
1.6
1.5
1.4
1.4
1.3
1.3
1.3
1.3
1.0
1.0

Global Exports
China
USA
Germany
Japan
Netherlands
France
South Korea
Russia
Italy
Hong Kong
UK
Canada
Belgium
Singapore
Saudi Arabia
Mexico
UAE
Chinese Taipei
India
Spain
Australia
Brazil
Thailand
Malaysia
Switzerland
Indonesia
Poland

100.0
11.1
8.4
7.6
4.3
3.6
3.1
3.0
2.9
2.7
2.7
2.6
2.5
2.4
2.2
2.1
2.0
1.9
1.6
1.6
1.6
1.4
1.3
1.2
1.2
1.2
1.0
1.0

Global Exports
China
USA
Germany
Japan
Netherlands
France
South Korea
UK
Hong Kong
Russia
Italy
Belgium
Canada
Singapore
Mexico
Saudi Arabia
UAE
Spain
India
Chinese Taipei
Australia
Brazil
Switzerland
Thailand
Malaysia
Poland
Indonesia

100.0
11.8
8.4
7.7
3.8
3.5
3.1
3.0
2.9
2.9
2.8
2.8
2.5
2.4
2.2
2.0
2.0
1.9
1.7
1.7
1.6
1.3
1.3
1.2
1.2
1.2
1.1
1.0

Source: WTO

INDIA EMERGING AS A GLOBAL PLAYER

India

1.9

Australia

Brazil

Thailand

Malaysia

Indonesia

India

1.7

1.5

Recent trends in global

exports would highlight the
increasing importance of
India as a trading nation

Indias share in global

exports rose from 0.7% in
2000 to 1.7% in 2013

India now ranks as 19th

largest global exporter, up
from 32nd position in 2000

India
has
overtaken
Australia, Brazil, Thailand,
Malaysia and Indonesia,
among others

1.7

1.5

Australia
1.3

Malaysia

1.3

1.1

Brazil
Thailand

1.1
1.0
1.0

1.3
1.2
1.2

Indonesia 1.0

0.9
0.9
0.7

0.7

0.5
2000

Source: WTO

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

INDIAS EXPORT: SHIFTING SOUTHWARDS

Indias Export Destinations 2003-04 (US$ 63.8 bn)
CIS & Baltics Others
1.6%
0.4%

Indias Export Destinations 2013-14 (US$ 312.6 bn)

CIS & Baltics Others
3.2%
1.1%
Europe
18.7%

Europe
24.5%
Asia
46.4%

Africa
6.0%
North
America
19.2%

LAC
1.8%

Asia
49.7%

Africa
10.0%
North
America
13.4%
LAC
4.0%

Direction of exports moving towards the Southern countries

Share of Asia, Africa and LAC regions increased sharply from 54% in 2003-04 to 64% in 2013-14; Of this, share of Asia
region rose from 46% to 50% during this period
Future trade flows to be geared towards the developing nations (buttressed by GOI policies)

Source: Ministry of Commerce & Industry, Government of India

INDIAS IMPORT: SHIFTING SOUTHWARDS

Indias Import Sources 2003-04 (US$ 78 bn)

Indias Import Sources 2013-14 (US$ 450.1 bn)

CIS & Baltics Others
0.6%
1.7%

Others
26.6%

Africa
4.1%

CIS & Baltics

1.6%
Asia
34.8%

Europe
15.7%
Africa
8.2%

Europe
24.0%

North
America
7.4%
LAC
1.5%

Asia
60.9%

North
America
5.6%
LAC
7.3%

Direction of imports also moving towards the Southern countries, particularly Asia, Africa and LAC

Share of Asia, Africa and LAC regions increased sharply from 40% in 2003-04 to 76% in 2013-14; Of this, share of Asia
region rose from 35% to 61% during this period

Source: Ministry of Commerce & Industry, Government of India

10

INDIAS EXPORT COMPOSITION

Indias Export s Composition 2003-04 (US$ 63.8 bn)
Others 5.3%
Petroleum
products
5.6%

Textiles
19.1%

Electronic
goods 2.8%

Gems &
jewellery
16.6%

Agri & allied

prdts 11.5%

Ores &
minerals
3.7%
Leather &
mnfrs 3.4%

Indias Export s Composition 2013-14 (US$ 312.6 bn)

Others 4.9%
Textiles 9.7%

Petroleum
products
20.1%

Chemicals &
related
products
15.6%
Engineering
goods 16.5%

Electronic
goods 2.5%

Gems &
jewellery
13.2%

Agri & allied

prdts 12.4%

Ores &
minerals
1.8%
Leather &
mnfrs 1.8%

Chemicals &
related
products
14.0%
Engineering
goods 19.7%

The composition of Indias export basket has witnessed a marked change over the past

There is a sharp increase in exports of petroleum products which accounted for 20.1% of Indias total exports in 2013-14
up from 5.6% witnessed in 2003-04

Source: Ministry of Commerce & Industry, Government of India

11

INDIAS INCREASING SHARE IN GLOBAL EXPORTS

HS
Code
27
71
87
29
84
30
10
52
85
72
62
73
61
39
03
02
63
88
23
89

Indias Top 20 Export Items

2009

2013

All products

1.4%

1.7%

1.3
10.5
0.7
2.1
0.5
1.2
3.5
8.2
0.6
1.5
3.8
1.8
3.4
0.6
1.8
1.3
5.6
0.6
3.1
4.3

2.1
8.1
1.0
2.8
0.6
2.3
9.1
17.4
0.4
2.5
4.4
2.4
3.4
1.0
4.8
4.0
8.4
1.8
4.4
3.0

Mineral fuels, oils, and it products

Pearls and precious stones
Vehicles other than railway or tramway
Organic chemicals
Machinery and equipments
Pharmaceutical products
Cereals
Cotton
Electrical and electronic equipment
Iron and steel
Articles of apparel, accessories, not knit or crochet
Articles of iron or steel
Articles of apparel, accessories, knit or crochet
Plastics and its articles
Fish, crustaceans and molluscs
Meat and edible meat offal
Other made textile articles and worn clothing
Aircraft, spacecraft, and its parts
Residues, wastes of food industry and animal fodder
Ships, boats and other floating structures

Source: Trade Map

Indias top 20 export items (HS-2

digit level) account for 79% of
Indias global exports

Over five years, Indias share in

global exports increased from 1.4%
to 1.7% in 2013

Major commodities that have

registered a significant growth in
their share in global exports
include: mineral fuels, oils and its
distillation
products;
pharmaceutical products; cereals;
cotton; Fish and crustaceans; meat
and edible meat offal; other made
textile articles and aircraft,
spacecraft, and parts
12

INDIAS MAJOR TRADING PARTNERS

Top Export Destinations (FY 2014, US$ bn)

USA

39.2

UAE

30.5

China

Top Import Sources (FY 2014, US$ bn)

China
Saudi Arabia

Hong Kong

12.7

USA

Singapore

12.5

Switzerland

Saudi Arabia

12.2

Iraq

8.0

Germany

7.5

Japan

Kuwait

9.8

Netherlands

36.5

UAE

14.9

UK

51.0

29.1
22.3
19.4
18.5
17.2

Qatar

15.7

Indonesia

14.9

Nigeria

14.3

Total Exports: US$ 312.6 billion

6.8

Source: Ministry of Commerce & Industry, Government of India

Total Imports: US$ 450.1 billion

13

INDIAS TRADE BASKET

Top Import Items (FY 2014, US$ bn)

Top Export Items (FY 2014, US$ bn)

Petroleum products

62.7

Petroleum crude & products

Engineering goods

61.6

Capital goods

Chemicals & related products

43.8

Gems and Jewellery

41.1

Agriculture & allied products**

38.9

Textiles and Garments

Electronic goods
Leather & manufactures
Ores and minerals
Carpets

30.4
7.7
5.7
5.6
Total exports: US$ 312.6 billion
1.0

Note: ** including plantation and marine products

Source: Ministry of Commerce & Industry, Government of India

165.1
49.1

Gold & silver

33.4

Electronic goods

31.0

Pearls & precious stones

24.0

Chemicals (organic & inorganic)

20.2

Coal, coke and briquettes

16.4

Metaliferrous ores & metal scrap

13.5

Edible oil
Artificial resins, etc.

9.3
Total Imports: US$ 450.1 billion
9.1

14

INDIAS TRADE IN SERVICES

Total Trade in Services
Exports

Imports

Software Exports

Trade Balance
220.5

226.5

Total Trade
230.0

205.2

62.2
156.0

Source: Reserve Bank of India (RBI)

46.3

49.7

69.5

53.1

151.5

145.7

78.5
73.0

142.3

124.6
80.6
44.0

2010-11

80.8
64.9

2009-10

78.2
64.1

2008-09

96.0
60.0
36.0

106.0
52.0
54.0

US$ billion

US$ billion

158.0

65.9

2011-12

2012-13

2013-14

2008-09 2009-10 2010-11 2011-12 2012-13 2013-14

15

INDIAS SHARE IN GLOBAL SERVICES EXPORTS

Rankings Country
Global Exports
1
USA
2
UK
3
Germany
4
France
5
Japan
6
Spain
7
Netherlands
8
Italy
9
China
10
Hong Kong
11
Ireland
12
Belgium
13
Canada
14
Singapore
15
India
16
Switzerland
17
South Korea
18
Denmark
19
Sweden
20
Austria

Source: WTO

2005
100.0
14.7
8.1
6.4
4.8
4.3
3.7
3.6
3.5
2.9
2.5
2.3
2.2
2.2
2.2
2.0
1.9
1.9
1.7
1.7
1.7

Country
Global Exports
USA
UK
Germany
France
Japan
Spain
China
Italy
Netherlands
Ireland
India
Singapore
Hong Kong
Belgium
South Korea
Switzerland
Canada
Luxembourg
Sweden
Denmark

2007
100.0
14.1
8.3
6.4
4.3
3.7
3.7
3.5
3.2
3.2
2.7
2.5
2.4
2.4
2.1
2.1
1.9
1.9
1.9
1.8
1.8

Country
Global Exports
USA
UK
Germany
France
China
Japan
Spain
Netherlands
India
Hong Kong
Ireland
Italy
Singapore
Belgium
South Korea
Switzerland
Canada
Luxembourg
Denmark
Sweden

2010
100.0
14.3
6.9
6.4
5.0
4.2
3.6
3.2
3.0
3.0
2.7
2.5
2.5
2.4
2.4
2.2
2.1
1.9
1.6
1.6
1.6

Country
Global Exports
USA
UK
Germany
France
China
India
Japan
Spain
Netherlands
Hong Kong
Ireland
Singapore
South Korea
Italy
Belgium
Switzerland
Canada
Luxembourg
Sweden
Denmark

2012
100.0
14.6
6.5
6.1
4.9
4.3
3.3
3.3
3.1
3.0
2.8
2.6
2.5
2.5
2.4
2.3
2.0
1.8
1.6
1.6
1.5

Country
Global Exports
USA
UK
Germany
France
China
India
Japan
Spain
Netherlands
Hong Kong
Ireland
Singapore
South Korea
Italy
Belgium
Switzerland
Luxembourg
Canada
Sweden
Denmark

2013
100.0
14.6
6.2
6.2
5.0
4.4
3.3
3.1
3.1
3.1
2.9
2.6
2.5
2.4
2.4
2.2
2.0
1.7
1.7
1.6
1.5

16

INCREASING SHARE IN SERVICES EXPORTS

India

3.5

Thailand

Australia

Malaysia

Brazil

Indonesia

India has emerged as a

major global player in
services exports

Indias share in global

services exports rose from
1.1% in 2000 to 3.3% in
2013

India now ranks as 6th

largest global exporter, up
from 25th position in 2000

India way ahead of

Thailand, Australia, Brazil,
Malaysia and Indonesia,
among others

Software exports account

for nearly 46% of Indias
services exports (2013)
17

3.3

India

3.0
2.5

2.0
1.5

1.3

1.3

Australia
1.0
0.5

1.1
0.9
0.9
0.6

1.1

Thailand
Malaysia

0.8
0.8

Brazil

0.5

0.3

Indonesia
0.0
2000

Source: WTO

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

INDIAS DIRECT INVESTMENT FLOWS

Foreign Direct Investment Inflows & Outflows
FDI Inflows

FDI Outflows
43.9

41.9

46.6

FDI inflow into India increased to

37.7
34.8

36.9
36.0

34.3

to US$ 34.3 bn in 2012-13

30.9
US$ billion

US$ 36 bn in 2013-14, as compared

26.9
17.1

FDI

18.0

outflow

from

India

also

increased to US$ 36.9 bn in 201314, against US$ 26.9 bn in 2012-13

2008-09

2009-10

2010-11

2011-12

2012-13

2013-14

Note: FDI Outflows include Equity, Loan and Guarantee Issued

Source: Reserve Bank of India (RBI)

18

INDIAS FOREIGN DIRECT INVESTMENT FLOWS

Indias FDI Inflows FY 2014 (US$ 24.3 bn)*
Sector-wise FDI Inflows Construction

Top FDI Investing Countries

France
Switzerland 1%
2%
Cyprus
2%
USA
3%
Germany
4%
Japan
7%

Netherlands
10%

Services
sector
9%

Others
13%
Singapore
25%
Others
52%

Source: DIPP

Computer
Software &
Hardware
5%
Pharma
5%

Mauritius
20%

Automobile
industry
6%

UK
13%
Hotel &
Tourism
2%

Note : *- data is for FDI equity inflow

5% Telecom
5%

Power
Metallurgical 5%
Industries
2%

Chemicals
(other than
fertilizers)
4%

19

INDIAS FOREIGN DIRECT INVESTMENT FLOWS

Indias FDI Outflows FY 2014 (US$ 36.9 bn)
Regional FDI Outflows

Cayman
Island
2%
Azerbaijan
2%
Switzerland
3%
UK

Others
9%

4%

Netherlands
26%

UAE
5%
USA
6%
Mozambique
7%

Singapore
14%

Mauritius
12%
British Virgin
Island
10%
Note: FDI Outflows include Equity, Loan and Guarantee Issued

Source: Reserve Bank of India

Financial,
ins. &
business
services
8%

Sector-wise FDI Outflows

Construction
5%

Others
4%

Transp.,
storage &
communicatio
n services
28%

Wholesale,
retail trade,
restaurants
& hotels
10%

Agriculture &
mining
21%

Manufg.
24%

20

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Indias
Globalization
www.eximbankindia.in

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