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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
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
Strong Economic Fundamentals
3
INDIAN ECONOMY SNAPSHOT
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
PARAMETER FY 2004 FY 2009 FY 2012 FY 2013 FY 2014
GDP (current prices, US$ bn) 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
Forex Reserves (US$ bn) (as on end-March) 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
4
INDIAS INTERNATIONAL TRADE
Source: Ministry of Commerce & Industry, Government of India
Towards Increased Global Integration through Trade
Indias total merchandise trade increased from US$ 489
bn in FY 2007 to US$ 763 bn in FY 2014
Fall in Trade deficit to US$ 138 billion in FY2014 from
US$ 190 billion in FY 2013
Policy measures lead to decline in imports during
FY 2014
Exports from India have increased by 9.3% in the first
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
Share of India in world merchandise export 1.7% in
2013; Rank 19 (up from 26th in 2007)
18
5.3
17
8.8
25
1.1
30
6.0
30
0.4
31
2.6
30
3.7
28
8.4
36
9.8
48
9.3
49
0.7
45
0.1
489.0 467.1
620.9
795.3 791.1 762.7
-118.4 -109.6 -118.7 -183.3 -190.3
-137.5
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
US$
bill
ion
Exports Imports Total Trade Trade Balance
5
INDIAS INTERNATIONAL TRADE
Source: RBI and IIF
Increasing Trade Intensity Trade-GDP Ratio increased from 36.5% to 51.6%
Indias merchandise trade to GDP ratio
increased from 26.6% in 2004-05 to 39.3% in
2013-14
Merchandise export to GDP ratio increased
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
Services export to GDP ratio stood at 8.1% in
2013-14
6
11.8 17.0
6.0 8.1
26.6
39.3
9.8 12.2
36.5
51.6
% o
f G
DP
Merchandise Exports % GDP Services Exports % GDP
Merchandise Trade % GDP Services Trade % GDP
Total Trade (Merch. + Serv.) % of GDP
INDIAS SHARE IN GLOBAL MERCHANDISE EXPORTS
Source: WTO
Rankings Country 2005 Country 2007 Country 2010 Country 2012 Country 2013
Global Exports 100.0 Global Exports 100.0 Global Exports 100.0 Global Exports 100.0 Global Exports 100.0
1 Germany 9.2 Germany 9.4 China 10.3 China 11.1 China 11.8
2 USA 8.6 China 8.7 USA 8.4 USA 8.4 USA 8.4
3 China 7.3 USA 8.2 Germany 8.2 Germany 7.6 Germany 7.7
4 Japan 5.7 Japan 5.1 Japan 5.0 Japan 4.3 Japan 3.8
5 France 4.4 France 4.0 Netherlands 3.8 Netherlands 3.6 Netherlands 3.5
6 Netherlands 3.9 Netherlands 3.9 France 3.4 France 3.1 France 3.1
7 UK 3.7 Italy 3.6 South Korea 3.0 South Korea 3.0 South Korea 3.0
8 Italy 3.6 UK 3.2 Italy 2.9 Russia 2.9 UK 2.9
9 Canada 3.4 Belgium 3.1 UK 2.7 Italy 2.7 Hong Kong 2.9
10 Belgium 3.2 Canada 3.0 Belgium 2.7 Hong Kong 2.7 Russia 2.8
11 Hong Kong 2.8 South Korea 2.6 Hong Kong 2.6 UK 2.6 Italy 2.8
12 South Korea 2.7 Russia 2.5 Russia 2.6 Canada 2.5 Belgium 2.5
13 Russia 2.3 Hong Kong 2.5 Canada 2.5 Belgium 2.4 Canada 2.4
14 Singapore 2.2 Singapore 2.1 Singapore 2.3 Singapore 2.2 Singapore 2.2
15 Mexico 2.0 Mexico 1.9 Mexico 1.9 Saudi Arabia 2.1 Mexico 2.0
16 Chinese Taipei 1.9 Spain 1.8 Chinese Taipei 1.8 Mexico 2.0 Saudi Arabia 2.0
17 Spain 1.8 Chinese Taipei 1.8 Spain 1.7 UAE 1.9 UAE 1.9
18 Saudi Arabia 1.7 Saudi Arabia 1.7 Saudi Arabia 1.6 Chinese Taipei 1.6 Spain 1.7
19 Malaysia 1.3 UAE 1.3 India 1.5 India 1.6 India 1.7
20 Sweden 1.2 Malaysia 1.3 UAE 1.4 Spain 1.6 Chinese Taipei 1.6
21 Switzerland 1.2 Switzerland 1.2 Australia 1.4 Australia 1.4 Australia 1.3
22 Austria 1.2 Sweden 1.2 Brazil 1.3 Brazil 1.3 Brazil 1.3
23 Brazil 1.1 Austria 1.2 Malaysia 1.3 Thailand 1.2 Switzerland 1.2
24 UAE 1.1 Brazil 1.1 Switzerland 1.3 Malaysia 1.2 Thailand 1.2
25 Thailand 1.1 Thailand 1.1 Thailand 1.3 Switzerland 1.2 Malaysia 1.2
26 Australia 1.0 India 1.1 Poland 1.0 Indonesia 1.0 Poland 1.1
27 India 0.9 Australia 1.0 Sweden 1.0 Poland 1.0 Indonesia 1.0 7
INDIA EMERGING AS A GLOBAL PLAYER
Source: WTO
0.7
1.7
1.0
1.3
0.9
1.3
1.1 1.2
1.5
1.2
1.0 1.0
0.5
0.7
0.9
1.1
1.3
1.5
1.7
1.9
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
India Australia Brazil Thailand Malaysia Indonesia
India
Australia
Brazil Malaysia
Thailand
Indonesia
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
8
INDIAS EXPORT: SHIFTING SOUTHWARDS
Indias Export Destinations 2003-04 (US$ 63.8 bn) Indias Export Destinations 2013-14 (US$ 312.6 bn)
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
Europe 18.7%
Africa 10.0%
North America
13.4%
LAC 4.0%
Asia 49.7%
CIS & Baltics 1.1%
Others 3.2%
Europe 24.5%
Africa 6.0%
North America
19.2%
LAC 1.8%
Asia 46.4%
CIS & Baltics 1.6%
Others 0.4%
9
INDIAS IMPORT: SHIFTING SOUTHWARDS
Indias Import Sources 2003-04 (US$ 78 bn) Indias Import Sources 2013-14 (US$ 450.1 bn)
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
Europe 15.7%
Africa 8.2%
North America
5.6%
LAC 7.3%
Asia 60.9%
CIS & Baltics 1.7%
Others 0.6%
Europe 24.0%
Africa 4.1%
North America
7.4% LAC
1.5%
Asia 34.8%
CIS & Baltics 1.6%
Others 26.6%
10
INDIAS EXPORT COMPOSITION
Indias Export s Composition 2003-04 (US$ 63.8 bn) Indias Export s Composition 2013-14 (US$ 312.6 bn)
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
Agri & allied prdts 11.5%
Ores & minerals
3.7% Leather &
mnfrs 3.4%
Chemicals & related
products 15.6%
Engineering goods 16.5%
Gems & jewellery
16.6%
Electronic goods 2.8%
Textiles 19.1%
Petroleum products
5.6%
Others 5.3%
Agri & allied prdts 12.4%
Ores & minerals
1.8%
Leather & mnfrs 1.8%
Chemicals & related
products 14.0%
Engineering goods 19.7% Gems &
jewellery 13.2%
Electronic goods 2.5%
Petroleum products
20.1%
Textiles 9.7%
Others 4.9%
11
INDIAS INCREASING SHARE IN GLOBAL EXPORTS
Source: Trade Map
HS Code
Indias Top 20 Export Items 2009 2013
All products 1.4% 1.7% 27 Mineral fuels, oils, and it products 1.3 2.1
71 Pearls and precious stones 10.5 8.1
87 Vehicles other than railway or tramway 0.7 1.0
29 Organic chemicals 2.1 2.8
84 Machinery and equipments 0.5 0.6
30 Pharmaceutical products 1.2 2.3
10 Cereals 3.5 9.1
52 Cotton 8.2 17.4
85 Electrical and electronic equipment 0.6 0.4
72 Iron and steel 1.5 2.5
62 Articles of apparel, accessories, not knit or crochet 3.8 4.4
73 Articles of iron or steel 1.8 2.4
61 Articles of apparel, accessories, knit or crochet 3.4 3.4
39 Plastics and its articles 0.6 1.0
03 Fish, crustaceans and molluscs 1.8 4.8
02 Meat and edible meat offal 1.3 4.0
63 Other made textile articles and worn clothing 5.6 8.4
88 Aircraft, spacecraft, and its parts 0.6 1.8
23 Residues, wastes of food industry and animal fodder 3.1 4.4
89 Ships, boats and other floating structures 4.3 3.0
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) Top Import Sources (FY 2014, US$ bn)
Source: Ministry of Commerce & Industry, Government of India
6.8
7.5
8.0
9.8
12.2
12.5
12.7
14.9
30.5
39.2
Japan
Germany
Netherlands
UK
Saudi Arabia
Singapore
Hong Kong
China
UAE
USA
Total Exports: US$ 312.6 billion
14.3
14.9
15.7
17.2
18.5
19.4
22.3
29.1
36.5
51.0
Nigeria
Indonesia
Qatar
Kuwait
Iraq
Switzerland
USA
UAE
Saudi Arabia
China
Total Imports: US$ 450.1 billion
13
INDIAS TRADE BASKET
Top Export Items (FY 2014, US$ bn) Top Import Items (FY 2014, US$ bn)
Note: ** including plantation and marine products
Source: Ministry of Commerce & Industry, Government of India
1.0
5.6
5.7
7.7
30.4
38.9
41.1
43.8
61.6
62.7
Carpets
Ores and minerals
Leather & manufactures
Electronic goods
Textiles and Garments
Agriculture & allied products**
Gems and Jewellery
Chemicals & related products
Engineering goods
Petroleum products
Total exports: US$ 312.6 billion 9.1
9.3
13.5
16.4
20.2
24.0
31.0
33.4
49.1
165.1
Artificial resins, etc.
Edible oil
Metaliferrous ores & metal scrap
Coal, coke and briquettes
Chemicals (organic & inorganic)
Pearls & precious stones
Electronic goods
Gold & silver
Capital goods
Petroleum crude & products
Total Imports: US$ 450.1 billion
14
INDIAS TRADE IN SERVICES
Total Trade in Services Software Exports
Source: Reserve Bank of India (RBI)
10
6.0
96
.0
12
4.6
14
2.3
14
5.7
15
1.5
52
.0
60
.0
80
.6
78
.2
80
.8
78
.5
54
.0
36
.0
44
.0
64
.1
64
.9
73
.0
158.0 156.0
205.2 220.5 226.5
230.0
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
US$
bill
ion
Exports Imports Trade Balance Total Trade
46.3 49.7
53.1
62.2 65.9
69.5
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
US$
bill
ion
15
INDIAS SHARE IN GLOBAL SERVICES EXPORTS
Source: WTO
Rankings Country 2005 Country 2007 Country 2010 Country 2012 Country 2013
Global Exports 100.0 Global Exports 100.0 Global Exports 100.0 Global Exports 100.0 Global Exports 100.0
1 USA 14.7 USA 14.1 USA 14.3 USA 14.6 USA 14.6
2 UK 8.1 UK 8.3 UK 6.9 UK 6.5 UK 6.2
3 Germany 6.4 Germany 6.4 Germany 6.4 Germany 6.1 Germany 6.2
4 France 4.8 France 4.3 France 5.0 France 4.9 France 5.0
5 Japan 4.3 Japan 3.7 China 4.2 China 4.3 China 4.4
6 Spain 3.7 Spain 3.7 Japan 3.6 India 3.3 India 3.3
7 Netherlands 3.6 China 3.5 Spain 3.2 Japan 3.3 Japan 3.1
8 Italy 3.5 Italy 3.2 Netherlands 3.0 Spain 3.1 Spain 3.1
9 China 2.9 Netherlands 3.2 India 3.0 Netherlands 3.0 Netherlands 3.1
10 Hong Kong 2.5 Ireland 2.7 Hong Kong 2.7 Hong Kong 2.8 Hong Kong 2.9
11 Ireland 2.3 India 2.5 Ireland 2.5 Ireland 2.6 Ireland 2.6
12 Belgium 2.2 Singapore 2.4 Italy 2.5 Singapore 2.5 Singapore 2.5
13 Canada 2.2 Hong Kong 2.4 Singapore 2.4 South Korea 2.5 South Korea 2.4
14 Singapore 2.2 Belgium 2.1 Belgium 2.4 Italy 2.4 Italy 2.4
15 India 2.0 South Korea 2.1 South Korea 2.2 Belgium 2.3 Belgium 2.2
16 Switzerland 1.9 Switzerland 1.9 Switzerland 2.1 Switzerland 2.0 Switzerland 2.0
17 South Korea 1.9 Canada 1.9 Canada 1.9 Canada 1.8 Luxembourg 1.7
18 Denmark 1.7 Luxembourg 1.9 Luxembourg 1.6 Luxembourg 1.6 Canada 1.7
19 Sweden 1.7 Sweden 1.8 Denmark 1.6 Sweden 1.6 Sweden 1.6
20 Austria 1.7 Denmark 1.8 Sweden 1.6 Denmark 1.5 Denmark 1.5
16
INCREASING SHARE IN SERVICES EXPORTS
Source: WTO
Australia
Brazil Malaysia
Thailand
Indonesia
India
1.1
3.3
0.9
1.3 1.3
1.1 0.9
0.8
0.6 0.8
0.3 0.5
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013
India 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
INDIAS DIRECT INVESTMENT FLOWS
Foreign Direct Investment Inflows & Outflows
Note: FDI Outflows include Equity, Loan and Guarantee Issued
Source: Reserve Bank of India (RBI)
FDI inflow into India increased to
US$ 36 bn in 2013-14, as compared
to US$ 34.3 bn in 2012-13
FDI outflow from India also
increased to US$ 36.9 bn in 2013-
14, against US$ 26.9 bn in 2012-13
41.9
37.7 34.8
46.6
34.3 36.0
17.1 18.0
43.9
30.9
26.9
36.9
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14
US$
bill
ion
FDI Inflows FDI Outflows
18
INDIAS FOREIGN DIRECT INVESTMENT FLOWS
Indias FDI Inflows FY 2014 (US$ 24.3 bn)*
Sector-wise FDI Inflows
Note : *- data is for FDI equity inflow Source: DIPP
Top FDI Investing Countries
Services sector
9%
Construction 5% Telecom
5%
Computer Software & Hardware
5%
Pharma 5%
Automobile industry
6%
Chemicals (other than fertilizers)
4%
Power 5% Metallurgical
Industries 2%
Hotel & Tourism
2%
Others 52%
Singapore 25%
Mauritius 20%
UK 13%
Netherlands 10%
Japan 7%
Germany 4%
USA 3%
Cyprus 2%
Switzerland 2%
France 1%
Others 13%
19
INDIAS FOREIGN DIRECT INVESTMENT FLOWS
Indias FDI Outflows FY 2014 (US$ 36.9 bn)
Sector-wise FDI Outflows Regional FDI Outflows
Note: FDI Outflows include Equity, Loan and Guarantee Issued
Source: Reserve Bank of India
Netherlands 26%
Singapore 14%
Mauritius 12% British Virgin
Island 10%
Mozambique 7%
USA 6%
UAE 5%
UK 4%
Switzerland 3%
Azerbaijan 2%
Cayman Island
2%
Others 9% Transp.,
storage & communicatio
n services 28%
Manufg. 24%
Agriculture & mining
21%
Wholesale, retail trade, restaurants
& hotels 10%
Financial, ins. &
business services
8%
Construction 5%
Others 4%
20
Partner in
Indias Globalization
www.eximbankindia.in
21