The economy of India is

• 10th largest in the world by nominal GDP

• 3rd largest by purchasing power parity (PPP).

• On a per-capita-income basis, India ranked 141st by nominal GDP

•130th by GDP (PPP) in 2012,

• According to the IMF, India is the 19th-largest exporter

• 10th-largest importer in the world.

Foreign Trade Policy 2009-14

Short Term Objectives:arrest and reverse the declining trend of exports. provide support to those sectors which have been hit badly by recession.

Medium term Policy Objectives :achieve an Annual Export growth of 15% by March 2013. achieve Annual Export growth of around 25% by 2014.

Long Term Objective :doubling India’s share in Global Trade by 2020.

TARGETS :Export Target : $ 350 Billion for 2012-13Export Growth Target: 15 % for next two year and 25 % thereafter.

Import/Export Controls

IMPORTS

•Around 5% Tariff Lines are under Import Controls. •11600 Tariff Lines are free for import.•Restrictions removed over the next 10 years, removing almost all the Quantitative Restrictions. •Presently:

Prohibited items - 53 LinesRestricted items - 485 LinesState Trading Items - 33 Lines.

EXPORTS:• Controls primarily on account of security, public health, morals, exhaustible resources and environment grounds.

Prohibited items - 59 Restricted items - 155 State Trading Items - 12

•Restrictions fall under two Categories:-Special provision for these items under Weapons of Mass Destruction Act, 2005.Export Facilitation Committee looks into applications for license for these items.

{Special chemical ,organisms, materials, equip. & tech.}

Recent changes in the pattern of India’s Export and Import

•India’s share of imports from European countries fell to 17.32% in 2012-13•India’s Import from the US has decreased to 4.94% from 5.89% earlier, according to Export Import Data India.•India’s exports of Goods have decreased by 1.76% in 2012-13 to around $301 billion, while its imports grew by 0.44% to $491 billion.•Indian imports from the US for electronic items has seen an increase of around USD 2.1 billion in FY 2012-13, on the other hand its imports of machinery and equipments has declined.

Reasons for changes in exports and imports in India

INCREASE IN IMPORTS

•Large increase in value of imports :•Large increase in import of petroleum •Fertiliser imports :•Imports of pearl and precious stones •Lower import tariffs, and buoyant domestic economy boosted imports

MODEST GROWTH IN EXPORTS

•Low income and price elasticity of goods exported •Import restriction on our goods entering foreign countries :•Disintegration of the Soviet Union •Increased domestic demand •Appreciation and depreciation of Rupee:•Low world demand

RECOMENDATIONS:•India should cultivate more trade relations with Africa, South America and Middle-East Asian Countries as these rich countries would offer huge markets for India's export.•Focus on import substitution as much as possible by investing in R&D activities.•Incentives must be provided to exporters so that they are ready to take the risk of change in exchange rates like tax holiday, reduction of export duties, etc.•Increase in production so as to cater increased domestic demand along with foreign demand.•Improvement in quality of goods so as to make them more competitive in the global markets