Commerce and Industries in India

Foreign trade has played a crucial role in India's economy growing at almost three times the growth of GDP during the last four years. India's exports cover a wide range of items including engineering goods, ores and minerals, chemicals and related products, gems and jewellery and of late, petroleum products. Imports have increased substantially, bulk of which comprise items like petroleum and crude products, fertilizers, precious and semi-precious stones for export production, and capital goods, raw materials, consumables and intermediates for industrial production and technological upgradation.

Trade Scenario

India's total external trade (exports plus imports including re-exports) in the year 1950-51 stood at Rs. 1214 crore. Since then, this has witnessed continuous increase with occasional downturns. During 2007-08 the value of India's external trade reached Rs. 1605022 crore. A statement indicating India's total export, import, total value of foreign trade and balance of trade from the year 1991-92 to 2007-08(P), in rupee terms, is given in table 7.1 (see above).

India's exports of merchandise goods touched the target of US$159 billion in 2007-08 recording a growth of around 26% in dollar terms. In Rupee terms, the exports of merchandise goods during 2007-08 was valued at Rs. 640172 compared to Rs. 571779 crore in 2006-07 with a growth rate of 12%. India's growth of exports is much higher than that of the world economy as well as many major economies of the world.

At the same time, imports increased from Rs. 840506 crore in 2006-2007 to Rs. 964850 crore during 2007-2008 thereby registering a growth of 29% in rupee terms. The trade deficit in 2007-08 was increased to Rs. (-)324678 crore as against Rs. (-) 268727 crore during 2006-07.

India has trading relations with all the major trading blocks and all the geographical regions of the world. Region-wise and sub region-wise spread of India's trade during 2006-07 and 2007-08 is given in table 7.2. In dollar terms, Asia & Asean accounted for 51.54 per cent of India's total exports, followed by Europe (22.99%) and America (17.04%). India's imports were highest from Asia & Asean (62.52%) followed by Europe (19.97%) and America (9.05%), during the same period.