India’s Foreign Trade

In India the Ministry of Commerce is responsible for the national external trade and related matters such as export promotion measures, commercial relations with other countries, development and regulation of export oriented industries and commodities and state trading. The Ministry formulates and implements policies in the sphere of foreign trade, reflected in the Export-import Policy of the country. In addition, the Ministry also undertakes promotional measures to promote exports.

Trade Policy liberalisation began in June 1991 and focussed on liberalisation, openness, transparency and globalisation. The reform package focussed on outward orientation in the economy from import regulating activity to export promotion activity, moving away from quantitative restrictions to tariff protection and improving competitiveness of the Indian industry to meet global market requirements.

Highlights of trade performance

• India's exports during April-December, 1998-99 was US $24286.87 million compared to the export level of US $25006.48 million for the corresponding period of the previous year registering a decline of 2.88 per cent.

• Imports during April-December, 1998-99 was US $31582.86 million, which is 7.12 per cent higher than the level of US $ 29484.77 million during the same period last year.

• The trade deficit for April-December, 1998-99 was US $7295.99 million, which is higher than the deficit at US $4478.29 million during the same period last year.

• The principal commodities in respect of which India’s exports registered an increase during April – November 1998-99 in dollar terms are tea, guargum meals, rice, castor oil, coal, gems and jewellery, readymade garments, natural silk textiles, coir and coir manufactures, handicrafts, processed fruits and juices, floriculture products and mica.

Exports

Exports during April-May 1999 are valued at US$ 5301.25 million, which is 6.09 per cent higher than the level of US$ 4996.97 million in April-May 1998. In rupee terms, the exports were Rs.22661.8 crore, which is 13.26 per cent higher than the value of exports during April-May 1998.

Exports during May 1999 are estimated at US$ 2646.12 million, which is 11.68 per cent higher than the level of US$ 2369.37 million in May 1998. In rupee terms, the exports grew by 18.03 per cent during this period.

Imports

Imports during April-May 1999 are estimated at US$ 6591.27 million which is 3.81 per cent higher than the level of US$ 6852.07 million during the same period last year. Oil imports during April–May 1999 are valued at US $ 1252.66 million which is 36.17 per cent higher than oil imports valued at US$ 919.91 million in the corresponding period last year. Non-oil imports during April-May 1999 are estimated at US$ 5338.61 million which is 10.0 per cent lower than the level of such imports valued at US$ 5932.16 million in April-May 1998.

Imports during May 1999 are valued at US$ 3402.90 million representing a growth of 1.64 per cent over the level of US$ 3347.92 million in May 1998.

Trade Balance

The trade deficit for April-May 1999 is estimated at US $ 1290.02 million, which is lower than the deficit during April-May 1998.

Statistical summary

India’s Foreign Trade (US$ billion)

	April – March
Exports	Value	Percentage Growth*
1994-95	26.33	18.40
1995-96	31.80	20.80
1996-97	33.11	4.00
1997-98	32.44	-2.01
1998-99	33.64	3.70
1998 April-May	4.997
1999 April-May	5.301	6.09
Imports
1994-95	28.65	22.90
1995-96	36.68	28.00
1996-97	38.55	6.00
1997-98	38.81	0.67
1998-99	41.88	6.93
1998 April-May	6.852
1999 April-May	6.591	-3.81
Trade Balance
1995-96	4.54(-)
1996-97	5.44(-)
1997-98	6.37(-)
1998-99	8.25(-)
1998 April-May	1.855(-)
1999 April-May	1.290(-)

After a setback during 1991-92 when exports declined by 1.5 per cent in dollar terms, revival of exports started during 1992- 93. Indian exports registered on average growth of around 20 per cent in dollar terms during 1993-94 to 1995-96. However, this high growth could not be sustained and export growth rate declined to 5.3 per cent in 1996-97 and to 1 .5 per cent during 1997-98. During April-December, 1998-99 India's exports were valued at US $ 24,287 million registering a decline of 2.88 per cent in dollar terms, though in Rupee terms the growth was positive and high of 11.69 per cent.