foreign trade
DESCRIPTION
foreign trade transation with clear explanationTRANSCRIPT
•Foreign trade also called , international
Trade
•Trade among countries is normal & desirable.
•The fact remains that the natural resources
of earth are not evenly distributed.
• FOREIGN TRADE is significant for the
economic development of developing
countries
• The process of industrialization
• To reduce the scarcity of consumer
Goods.
India & Global Trade:India & Global Trade: India had a significant share in the
world trade at the time of independence. However, since then there was a secular decline in India’s share in the world exports till 1980. since from 1950 to 1980 the percentage declined from 2 to 0.4. it has, how ever improved to about 0.8 by 1997 and is expected to reach one percent by 2000.
India’s Global shareFactor India’s share (percentage)
Area 2.47
Arable land 11.24
Population 16.78
GNP 1.50
GNP at purchasing power parity
5.45
FDI 0.5
Merchandise exports 0.7
Merchandise imports 0.8
Service exports 1.2
Service imports 1.4
•The value of foreign trade of our country
has been rising From year to year. It rose
from
Rs. 30,553 cr during 1985 – 86 to Rs.
8,38,575 cr during 2004 – 05, Representing
an increase of six times.
•It is because of the high stakes involved
in foreign Trade that the government of
India has assumed Sweeping powers of
control over our exports & imports.
Cont………..
EXPORTS as a % of national income
Year In %
1960-61 6.8
1970-71 3.8
1980-81 5.4
1990-91 7.2
1996-97 9.6
1997-98 8.4
1998-99 8.0
1999-00 8.5
2000-01 8.8
2001-02 8.7
2002-03 9.0
The break-up of foreign trade in terms of exports & import
Year Export Import TVOT BOT
1995-96 106353 122678 229031 -16325
1996-97 85623 97111 182734 -1488
1997-98 126286 151553 277839 -25267
1998-99 101850 132447 234297 -25267
2002-03 255137 297206 552343 -42067
2003-04 291582 353976 645558 -62394
2004-05 356625 481950 838575 -125190
•Exports help to finance imports
•Export earnings helps service external debt
•Exports would make our economy highly vibrant
EXPORTS: 5 FASTEST GROWING SECTORS (INDIA’S TOP EXPORT MARKET)
ITEMS 2003-04($bn)
2004-05($bn)
(%)change
Petroleum crude & products
3.57 6.79 90.34
Software 13.30 17.9 34.00
Gems & jewellery
10.57 13.71 29.62
Machinery 2.78 3.49 25.82
Drugs 3.31 3.71 12.14
•Imports will increase and to finance them, we need higher exports earning
•It is not advisable to depend on external assistance to finance imports
•Debt – servicing burden is ever mounting, necessitating increased export earning
5 FASTEST GROWING EXPORT DESTINATION
COUNTRY 2003-04($bn)
2004-05($bn)
(%)change
Singapore 2.12 3.80 78.63
China 2.96 4.59 55.20
UAE 5.13 7.10 38.48
US 11.49 13.27 15.45
Hong kong 3.26 3.65 11.94
TOP FIVE FASTEST GROWING NATIONS:
1994-95($ bn ) 2004-2005 ($bn)
US 5.02 EU 17.25
JAPAN 2.03 US 13.26
GERMANY 1.75 UAE 7.09
UK 1.69 CHINA 4.58
RUSSIA 0.81 SINGAPORE 3.80
TOP 5 EXPORTS,THEN & NOW
1994-95 2004-05($bn)
Gems & jewellery
4.50 Software 17.20
Readymade garments
2.28 Engineering goods
14.58
Cotton yarn, fabrics,
made-ups
2.23 Gems & jewellery
13.70
Marine products
1.13 Chemicals& related
products
12.67
Leather 1.06 Textiles 12.01
•Shortage of supply hampers growth
•Quality of goods and service
•Efficient trade information is non-existence
•Lack of competitive advantage too impedes exports
•The value of imports has increased from rupees 608 cr in 1950-51 to rupees 353976 cr in 2003-04
•In relation to national income, the imports during the first 30 years of planning varied between 6.5% and 8.5% of GDP the variation being minimal
•Again since 1979-80 this percentage varied between 8 & 12 signifying that ratio to GDP has been fairly stable
Rank Name of Commodity
Apr 2006 - Feb 2007
Export Value of Goods
%Growth %Share
Value (INR in Crores) Value (INR in Crores)
Value (INR in Crores)
1 India Import Of –crude oils
236,601.84 34.47 32.10
2 India Import Of –electronic goods
65,281.46 25.32 8.86
3 India Import Of - GOLD
58,704.81 37.35 7.97
4 India Import Of machinery
56,216.24 43.37 7.63
5 India Import Of –pearls n jewel
30,061.51 -21.37 4.08
Top Import (Products)
6 India Import Of – IRON & STEEL
24,413.75
40.20 3.31
7. India Import Of - ORGANIC
CHEMICALS
22,405.24
18.93 3.04
8. India Import Of - COAL, COKE &
BRIQUITTES etc
18,363.64
19.77 2.49
9. India Import Of - OTHER
COMMODITIES
18,258.34
-22.47
2.48
10 India Import of- Wheat
1,417.61 - 0.19
Foreign Trade 1994-95 1995-96 1996-97 1997-98 1998-99 1999-00
Exports
Rs in Crore 82674 (18.52)
106353 (28.64)
118817 (11.71)
130101 (9.49)
141604 (8.84)
162925(15.06)
US$ in Million 26330 (18.40)
31797 (20.76)
33470 (4.50)
35006 (4.60)
33659 (-3.84)
37599 (11.70)
Imports
Rs in Crore 89971 (23.04)
122678 (36.35)
138920 (11.69)
154176 (10.98)
176099 (14.21)
204583 (16.17)
US$ inMillion
28654 (22.94)
36678 (28.0)
39133 (6.70)
41484 (6.00)
41858 (0.90)
47212 (12.79)
Forex ** Reserves
Rs in Crore* 66006 (39.58)
58446 (-11.45)
80368 (37.50)
102507 (27.54)
124412 (22.34)
152924(21.94)
US$ in Million 20809 (38.10)
17044 (-18.09)
22367 (31.23)
25975 (16.13)
29522 (13.65)
35058(18.75)
INDIA’S EXPORT-IMPORT STATISTICS
•1 crore = 10 million
** Excluding US$ 2800 million of gold and US$ 2 million of Special Drawing Rights (SDRs) reserves as on November 24, 2000.
** Including US$ 5500 million deposit mobilized by the State Bank of India through India Millennium Deposit.
Figures in bracket indicate year-on-year difference
32.1
8.86
4.083.04 2.49
0
5
10
15
20
25
30
35
Petroleum Electronic Perals Organic Che coal, cokee
% of Share
Growth competitiveness
Govt Regulatory standard
Export promotion
Average tariff
Investment rates
Overall infrastructure
Technological sophistication
E- commerce
India 49 19 49 5 59 14 54 38 51
USA 1 25 5 26 15 41 7 1 1
Singapore 2 13 15 1 2 4 1 8 10
Finland 6 52 8 43 17 46 2 2 7
Canada 7 42 12 7 29 47 11 13 3
Hong Kong 8 2 25 45 1 11 8 18 20
UK 9 40 10 16 26 54 22 15 8
Switzerland 10 38 11 44 10 43 4 9 13
Indices of Global Competitiveness
Factor India’s share (percentage)
Area 2.47
Arable land 11.24
Population 16.78
GNP 1.50
GNP at purchasing power parity
5.45
FDI 0.5
Merchandise exports 0.7
Merchandise imports 0.8
Service exports 1.2
Service imports 1.4
India’s Global share
India’s RankFactor Rank Factor Rank
Population 2 Milk production 1
Area 7 Butter and ghee production
1
Arable land 2 Sugar production 2
Irrigation area 1 Merchandise exports 31
Tractors in use 2 Merchandise imports 26
Nitro fertiliser consumption 2 Service exports 22
Rice production 2 Service imports 19
Wheat production 2 GNP 12
Tobacco production 2 GNP at purchasing power parity
4
Tea production 1
India’s share of Developing Countries
Factor India’s share (performance)
Population 19.72
GNP 7.43
GNP at purchasing power parity
12.13
FDI 1.6
Merchandise exports 2.42
Merchandise imports 3.07
•The foreign trade (DEVELOPMENT AND REGULATION),ACT 1992 , empowers to regulate imports and augment exports
•The government announces its foreign trade policy once in 5 years popularly called EXIM POLICY
•The latest policy was announced in march 2007