[vc_row][vc_column][vc_column_text css=”.vc_custom_1679996585470{border-top-width: 1px !important;border-right-width: 1px !important;border-bottom-width: 1px !important;border-left-width: 1px !important;border-left-color: #000000 !important;border-left-style: solid !important;border-right-color: #000000 !important;border-right-style: solid !important;border-top-color: #000000 !important;border-top-style: solid !important;border-bottom-color: #000000 !important;border-bottom-style: solid !important;border-radius: 3px !important;}”]

India’s Foreign Trade Scenario

[/vc_column_text][vc_separator css=”.vc_custom_1647339034936{margin-bottom: 30px !important;}”][vc_column_text css=”.vc_custom_1679998391284{margin-bottom: 15px !important;}”]The Indian Economy is growing faster than most developing economies. A factor that is fueling this growth is a constant push by Indian policymakers to foreign trade of goods and services. Indian government has recognised exports and imports to be vital in their pursuit of a $5 trillion economy by FY2025. Against this backdrop, they have taken a plethora of steps and are actively breaking new ground regularly. These include the production linked incentive plans, economic cooperation agreements, trade pacts, loosening FDI regulation etc.

Foreign Direct Investment (FDI) is considered as a major source of non-debt financial resource for the economic development. FDI flows into India have grown consistently since liberalization and are an important component of foreign capital since FDI infuses long term sustainable capital in the economy and contributes towards technology transfer, development of strategic sectors, greater innovation, competition and employment creation amongst other benefits.

Following are a facts and figures of the FDI inflow into India over the past months and years.[/vc_column_text][vc_single_image image=”73028″ img_size=”large” css=”.vc_custom_1679997667022{margin-top: 20px !important;margin-right: 20px !important;margin-bottom: 20px !important;margin-left: 20px !important;border-radius: 1px !important;}”][vc_single_image image=”73029″ img_size=”large” css=”.vc_custom_1679997742739{margin-top: 20px !important;margin-right: 20px !important;margin-bottom: 20px !important;margin-left: 20px !important;border-radius: 1px !important;}”][vc_single_image image=”73030″ img_size=”large” css=”.vc_custom_1679997756619{margin-top: 20px !important;margin-right: 20px !important;margin-bottom: 20px !important;margin-left: 20px !important;border-radius: 1px !important;}”][vc_column_text css=”.vc_custom_1679998415437{margin-bottom: 15px !important;}”]Apart from foreign investments into Indian industries, government and corporate are focused on increase the export potential of the economy as well. There is an increased focus on supporting the MSME sector, which, traditionally, found it hard to bear the cost of exports, but now are increasing their share in the export pie.

India is among the group of select few countries that hold a considerable share in the total exports of the world. India contributes 2% to the total exports in the world. As a comparison, China contributes 15%, USA 8%, Germany 7% and other countries stand at par or below India.

India has a humungous export house for fish and crustaceans, molluscs and other aquatic invertebrates, coffee and tea and spices, cotton. India also has a formidable presence in exporting meat and edible meat offal, edible vegetable and certain roots and tubers, edible fruits and nuts, cereals, sugar and sugar confectionary, tobacco and tobacco manufactured substitutes, chemicals, pharmaceutical products, rubber and articles thereof, precious and semi-precious stones, iron and steel.

On the other hand, India also holds an important place in import as well, with a 3% share in global imports of products. We import huge amounts of vegetable and edible fats and oils, earth stones and salts, mineral fuels and oils and other organic/inorganic compounds, raw materials for fertilisers, raw silk (huge), peals and semi-precious stones

Trade pacts are entered into by parties for a number of reasons, such as to strengthen economic relations, further liberalise and expand trade and investment, enhance economic growth, create opportunities for workers and business, improving living standards, promote sustainable growth, recognise the need for a balanced trade agreement that encourages trade and investment flows. An economic cooperation agreement is entered into with an aim to undertake cooperation activities and encourage industries to do so too by engaging in technical consultation, exchanging information and industry best practices and by providing technical assistance.

Government of India has recently entered into a Comprehensive Economic Partnership Agreement with the Government of Australia and Government of United Arab Emirates. It is also in process of drafting the agreement with the British government. In the past, it has entered into agreement of similar nature with countries like Afghanistan, Africa, Bhutan, Japan, Korea, Malaysia, Mauritius, Nepal, Sri Lanka and Thailand among other countries and with groups like ASEAN, SAARC, SAPTA, MERCOSUR, etc.

India’s top 10 trading partners, in decreasing order, are United States of America, China, United Arab Emirates, Saudi Arabia, Russia, Indonesia, Iraq, Singapore, Hong Kong and Korea. Among these, India has a trade deficit with all countries except United States of America. Currently, the Indian trade deficit runs into lakhs of crores. Government, in the budget for FY24, announced their aim to reduce the fiscal deficit to 4.5% of the GDP by FY26. To achieve this, the country must reduce its import dependency and break new ground in export markets.[/vc_column_text][vc_zigzag][vc_column_text]

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