INDIA’S FOREIGN TRADE AND AGRICULTURE...
Transcript of INDIA’S FOREIGN TRADE AND AGRICULTURE...
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CHAPTER- V
INDIA’S FOREIGN TRADE AND AGRICULTURE EXPORTS
5.1 Introduction
The ‘outward looking’ exports promotion strategy adopted in 1991, led to significantly faster
growth of production and exports in India since then. The increased domestic competition in
international economic environment owns to formation WTO and other global economic
crises. The trade to GDP ratio in 1990-91 was around 11percent which has increased to more
than 30 percent in 2008-09 in India indicated tremendous growth in trades (economic survey,
2009-10). This clearly indicates greater degree of openness of Indian Economy. The present
chapter discusses growth and composition of India’s foreign trade, it further discusses growth
and composition of agriculture export in India since economic liberalization.
5.2 GDP growth rate in India
Indian economy recorded a high growth path triggered mainly by macroeconomic reforms
and expansion of economic activities across the sectors. However, there are some serious
concerns about a number of imbalances in the growth scenario inter-sectoral, interregional
and inter-state. As a result, the average productivity has remained very low as compared to
developed and other developing countries.
Table 5.1: Contribution of Different Sectors in National Income1980-81 to 2008-09
Year Primary sector (percentage)
Secondary sector (percentage)
Tertiary sector (percentage)
1980-81 41.8 21.6 36.6
1990-91 33 27 40
2000-01 28.1 24.8 47.1
2007-08 17.2 26.8 56
2008-09 17.1 25.9 57
Source: statistical outline of India2007-08, Monthly Economic report, March 2009
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The table 5.1 shows that national income up to 1980-81 contribution of primary sector had
more percentage than other two sectors. But after a decade it is just reversed tertiary sectors
has taken up the position, this has due to international demand to primary and secondary
sectors. This trend continued and was maintained during the year 2008-09 also i.e. 57 per
cent more than three times and more than two times of primary and secondary sectors. With
growth in GDP, the issue of rural-urban divide, regional divides and rich-poor divide became
evident, which brought “inclusive growth” on high priority. The Indian economy has been
growing at a faster rate in recent decades than it did earlier. Table 5.2 shows average rate of
growth in real GDP highest was observed during the year 2007-08, i.e. 9.2 percentage.
Table 5.2: Average Rate of Growth of Real GDP in India (1990-2010)
Source: CSO, Govt. of India, 2010
While the growth rate of the Indian economy has been increasing in recent times, though,
with fluctuation but one phenomenon which was observed was that the growth performance
of the three major sectors of the economy, namely, agriculture, industry and services, has
been diverse. The growth in the agriculture sector has been the most volatile and also the
least among the three sectors. While the growth in the industrial sector has remained more or
less constant with upward bias, growth rate in services sector has risen sharply. The
consequence of diverse growth rate in the three sectors has resulted in a structural change and
change in contribution of the sectors in the total GDP. The share of agriculture sector in
overall GDP has declined more or less consistently since economic liberalization,
Period Growth percentage
1990-2008 6.39
2000-2008 7.19
11 th plan period (2007-12)
2007-08 9.2
2008-09 6.7
2009-10 7.2
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Table 5.3 India’s Total Exports and Imports (1990-91 to 2007-08)
Source: Economic Survey 2010-11& Centre for Monitoring Indian Economy Sep, 2010
The total India’s Exports, Imports and their share in Gross Domestic products is given Table
5.3; the share of total exports in the total GDP was 5.72 percent in the year 1990-91, which
increased to 13.89 percent during 2007-08. Similarly, the share of total imports in the total
GDP was 7.39 percent, which increased to 21.28 percent in the same period. Almost similar
increase have been observed during the year 1995-96 and 2000-01 it was 8.92, 10.29 percent
and 9.58, 10.86 percent respectively. Thus it is clear from table that the last decade has seen
acceleration in growth of exports as well as imports compared to previous decades. The
import growth has been faster compared to growth of export resulting in widening of trade
deficit. On account of liberalization, privatization and globalization of the Indian economy,
the growth rate of GDP (at the factor cost at 1993-94prices) has increased in the post reform
period. Particularly since 2001- 02 onwards due to Indian economy adopting itself to
implementation of WTO and increased competition resulting in increased competitiveness of
Year
Total GDP
Rs. Crores Total
exports
Percentage share of total exports in
GDP Total Imports
Percent share of total Imports in
GDP
1990-91 515032 32558 5.72 42095 7.39
1995-96 1083289 106352 8.92 122678 10.29
2000-01 1925017 201350 9.58 228307 10.86
2001-02 2097726 209018 9.17 245200 10.76
2002-03 2261415 255137 10.39 297206 12.11
2003-04 2538170 293367 10.65 359108 13.04
2004-05 2971464 375340 11.92 501065 15.91
2005-06 3389621 456418 12.73 660409 18.41
2006-07 3952241 571779 13.85 838048 20.3
2007-08 4581422 655864 13.89 1005159 21.28
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economy. India has done fairly well in comparison to other regions and economies of the
world as shown in table 5.4 with regards to growth of GDP. The growth of export as well as
imports is robust during this period in India. However, imports have increased faster than
export, widening the gap.
Table: 5.4 GDP and Merchandise Trade by Region (2006-08) Annual percentage change at constant prices
GDP Exports Imports
2006 2007 2008 2006 2007 2008 2006 2007 2008
World 3.7 3.5 1.7 8.5 6.0 2.0 8.0 6.0 2.0
North America (a) 2.9 2.1 1.1 8.5 5.0 1.5 6.0 2.0 -2.5
United States 2.8 2.0 1.1 10.5 7.0 5.5 5.5 1.0 -4.0
Europe 3.1 2.8 1.0 7.5 4.0 0.5 7.5 4.0 -1.0
European Union (27) 3.0 2.8 1.0 7.5 3.5 0.0 7.0 3.5 -1.0
Commonwealth of Independent
States (CIS)
7.5 8.4 5.5 6.0 7.5 6.0 20.5 20.0 15.0
Africa 5.7 5.8 5.0 1.5 4.5 3.0 10.0 14.0 13.0
Middle East 5.2 5.5 5.7 3.0 4.0 3.0 5.5 14.0 10.0
Asia 4.6 4.9 2.0 13.5 11.5 4.5 8.5 8.0 4.0
China 11.6 11.9 9.0 22.0 19.5 8.5 16.5 13.5 4.0
Japan 2.0 2.4 -0.7 10.0 9.5 2.5 2.0 1.5 -1.0
India 9.8 9.3 7.9 11.0 13.0 7.0 8.0 16.0 12.5
Newly industrialized
economies (4)(b)
5.6 5.6 1.7 13.0 9.0 3.5 8.0 6.0 3.5
Source: WTO Secretariat & Economic Review 2009
a. Includes the Caribbean. b. Hong Kong, China; Republic of Korea; Singapore and Chinese Taipei.
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Thus, table 5.4 clearly indicates slowdown in economic activity around the world. Among
world economies China and India have emerged the fastest growing ones. Obviously
appropriate policy framework is required to reduce adverse impacts of global slowdown.
5.3 General trends in trade performance
Since 1991, India has transformed itself from one of the most closed large economies of the
world to a relatively more open one, with trade as a percentage of GDP reaching 47percent in
2006 and 46 percent in 2007 as shown in Table 5.5. The average annual real growth rate of
India’s exports of goods and services for the 1995-2007 periods was 12 percent well above
the world average growth of 7 percent.
Table 5.5 Total trade as a percentage of GDP (percentage)
Year
1990
1995
2000
2001
2002
2003
2004
2005
2006
2007
GDP (percentage
16
23 27 26 30 31 40 43 47 46
Source: World Development Indicators. & Organization for Economic Co-operation and Development, 2009
As discussed above, the shares of manufacturing in both the value added and total exports are
lower in India but this is not necessarily because the manufacturing sectors internationally
uncompetitive but because it has an unusually small share in the domestic economy. In fact,
according to Gaullier et al. (2005), up to 54.4 percent of manufacturing value-added was
exported in 2004.Nevertheless, despite its is relative abundance in skilled labor and capital,
India’s manufacturing exports are highly concentrated in low-technology goods and the share
of high-technology manufactured goods in its total exports has barely changed since the mid-
1990s. The table 5.6 provides data related to Share of India's goods and services trade in
world total, it shows service export and import has much higher than Merchandise export and
import.
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Table 5.6 Share of India's goods and services trade in world total
Export/Import 1995 2000 2005 2006 2007
Merchandise exports 0.6 0.7 1 1 1.1
Merchandise imports 0.8 0.8 1.3 1.4 1.4
Services exports 0.5 1.1 2.2 2.7 2.7
Services imports 0.8 1.2 2 2.4 2.4
Source: WTI (2008).
India’s current merchandise export structure remains heavily skewed towards petrol products,
jewelry, furniture, chemical products and textiles and wearing apparel, the structure of India’s
exports seems a little more concentrated in 2005 than in 1996 but this is largely driven by the
emergence of exports of petroleum products. In general, it is not easy to classify the direction
of changes in the structure of top Indian exports. On the one hand a few more sophisticated
products such as motor vehicle parts made it to the top 25 products in 2005. On the other
hand several traditional manufacturing products such as gems and jewelry, wearing apparel
and certain food products that already dominated Indian exports in 1996 have not gained in
importance in 2006. This suggests that India has not integrated into the global production
networks of high technology products to an extent. The strength of services provided an
impetus to, and now plays an important role in, India’s overall trade. The table 5.7 shows
Share of India's goods and services trade in world in 1995 merchandise exports was 0.6
percent compare to import share.8 percent, Services exports &Services imports was 0.5 & 0.8
percent respectively, it has reached 1.1 & 1.4 percent merchandise exports& imports in the
year 2007. Services exports &Services imports was 2.7 & 2.4 percent respectively in the
same period. The data reveals that share of trade of India’s to world trade has more than
doubled since the formation of WTO.
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Table: 5.7 Trade performance Volumes and Unit Values Annual per cent change
Year
Exports Imports Terms of Trade
Value Value
Rs. USD VOL Unit Val Rs. USD VOL Unit
Val Net Income
2001-02 2.7 -1.6 0.8 1 6.2 1.7 4 2.8 -2.1 -1.3
2002-03 22.1 20.3 19 2.9 21.2 19.4 5.8 14.3 -9.8 7.4
2003-04 15 21.1 7.3 7.5 20.8 27.3 17.4 3.1 3.6 11.2
2004-05 27.9 30.8 11.2 14.9 39.5 42.7 17.2 18.9 -3.5 7.3
2005-06 21.6 23.4 15.1 6.1 31.8 33.8 16 14 -6 8.2
2006-07 25.3 22.6 10.2 13.7 27.3 24.5 9.8 15.1 -1.3 8.8
2007-08 14.7 29 7.9 5.1 20.4 35.5 14.1 1.9 2.6 10.7
2008-09 28.2 13.6 9 16.9 35.8 20.7 20.2 13.8 2.5 11.7
2009-10 0.6 -3.5 -1.1 1 -0.8 -5 9.9 -10 12.3 11
Source: Computed from DGCI&S, Economic Survey, 2010-11
Thus, table: 5.7 Shows trade performance volumes and unit values annual per cent change
during the year 2001-02 values was in rupees 2.7 imports was in rupees 6.2 unit value was 1,
it has reduced to .6 and -0.8 in the year 2009-10 net income was positive I.e. 12.3and 11 but
earlier period it was negative i.e. -2.1and -1.3. The deceleration in export growth in rupee
terms in 2009-10 was not only due to a large deceleration of growth in unit values to 1.0 per
cent compared to 16.9 per cent in 2008-09 but also due to actual decline in quantum by 1.1
per cent compared to the 9 per cent growth in 2008-09. This was mainly due to the negative
growth in both volume and unit value of manufactured goods. Export volume of food and
food articles like rice, coffee, spices, and oilseed cake also fell (though their unit values (-)
8.0 per cent growth for the Association of South East Asian Nations (ASEAN) and the (-) 5.8
per cent growth for North America which are among our major trading partners and the high
negative growth of 22 percent for the Commonwealth of Independent States (CIS)
contributed to this fall in quantum of exports.
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Similarly a dissection of the import unit value indices, region-wise, shows that the negative
growth for the first time in the decade was due to the negative growth of unit values in
imports from all the regions, with the South African Development Community being the
exception. The deceleration of imports in rupee terms in 2009-10 was mainly due to the high
negative growth of unit value indices even while volume growth was moderately high. This,
in turn, was due to the high negative unit value growth in chemicals and related products
despite the moderate quantum growth; negative unit value growth of machinery and transport
equipment coupled with the low quantum growth; negative unit value growth in
miscellaneous manufactured articles and mineral fuels and nonfuel crude materials, despite
their positive quantum growths. The net terms of trade, which measures the unit value index
of exports as a proportion of unit value index of imports, improved by 12.3 per cent.
This was despite the very marginal positive growth in unit value index of exports as the
growth of unit value index of imports was negative for the first time in this decade at 10 per
cent. Income terms of trade, reflecting the capacity to import, grew at 11 percent like in the
two previous years. But unlike the earlier two years this was due to the high favorable growth
in net barter terms of trade while export volume growth was negative for the first time in this
decade.
5.4 India’s Export –Import
India’s primary products export during 1990-91 was US$ 4324 Million recorded increases to
US$ 7256 Million in 1995-96. The export has finally reached to US$ 27523.42 million in
2007-08. The increase in export and import raised the proportion of trade in agricultural GDP
from less than 5 percent in the beginning of reforms to close to nine and a half percent by
1995-96. After 1996-97, value of export started shrinking as international prices started
falling (Chand 2003). Due to falling international prices imports into the country became
more attractive and were facilitated due to liberalization of imports followed due to WTO
commitments. This way the net earnings from agriculture trade in the post WTO period
dropped to a very low level. The post WTO period showed increase in ratio of imports to
GDP whereas ratio of exports to GDP for agriculture sector followed small decline. This
shows that post WTO period has been adverse to export but favorable for imports. This
pattern shows sharp contrast with the first five years of reforms period when share of exports
in GDP experienced sizable increase.
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Marine products are the most important items of agricultural exports from India and oil
meal/cake remained the second most important item in most of the years (Table 4.8). Export
of marine products got a big boost with economic reforms in the initial years. During the post
WTO period marine products export did not show much increase. India has registered its
presence in a very big way in rice export in some years however these exports show very
large year-to-year fluctuations. Marine products export during 1990-91 was US$ 535 Million
recorded a increases to US$ 1010.8 Million in 1995-96. The export has finally reached to
US$ 1720.5 Million in 2007-08. Export of oil meal increased from US $ 339 Million in
1990-91 to US $ 702 Million in 1995-96 since then export has fallen to less than half. In the
case of commodities like cotton, wheat, and sugar, India occasionally export large quantity
but there is no consistent trend in these exports.
Exports of traditional items from India like spices, tea and coffee and groundnut could not
keep pace with the past after 1997-98. Export of horticultural products maintained upward
trend during post WTO period but total export of these products is low. In case of
manufactured goods export it has increased from US $ 12996.4 Million in 1990-91 to US $
23747 Million in 1995-96, finally in the year 2007-08 it has reached US $ 102944 Million.
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Table: 5.8 Exports of Principal Commodities – US Mn Dollar
Commodity/Year 1990-91
1995-96
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
I. Primary products 4324 7256.9 7126.2 7163.6 8706.1 9901.8 13553.3 16377.4 19686 27523.4 A. Agriculture and allied products 3354.4 6081.9 5973.2 5901.2 6710 7533.1 8474.7 10213.8 12683.5 18403.6 1. Tea 596.4 350.1 391.5 360.5 341.4 356.3 409.6 390.9 435.3 505.3 2. Coffee 140.6 449.3 259.4 229.6 205.4 236.3 237.9 358.8 435.1 465 3. Rice 257.2 1365.7 641.8 665.6 1204.9 907 1506.5 1405.2 1554.9 2918.7 4. Wheat 17.3 109.6 90.9 278.9 363.6 520.4 324.9 125.9 7.8 0.1 5. Cotton raw including waste 471.4 60.8 48.4 9 10.4 205.1 94 656 1349.8 2202 6. Tobacco 146.8 133.6 189.8 169.4 211.4 238.6 279.2 300.6 372.4 479.8 7. Cashew including cashew nut shell liquid 249.1 369.9 449.5 376.2 426 371 554 585.8 553.9 555.1
8. Spices 130.4 237.2 354.1 313.9 342.1 336 419.1 477.9 697.9 1044.3 9. Oil meals 339.1 702.1 447.6 474.5 307.3 728.7 707.2 1101.1 1216.4 2022 10. Fruits and vegetables 118.9 157.7 184.6 221.1 245.5 389.9 398.7 481.9 681.1 761.6
11. Processed fruits, juices, miscellaneous processed items 118.5 265.4 288.4 259.3 306.7 305.2 284.3 359 405.8 530.5
12. Marine products 535 1010.8 1393.8 1236.8 1431.6 1328.7 1439.8 1589.2 1768.2 1720.5 13. Sugar and mollases 20.9 151.4 110.6 373.6 374.9 269 34.5 135 720.6 1406.5 14. Meat and meat preparations 77.9 187.4 321.7 250.2 284.6 373.1 424 621.2 732.4 931.3 15. Others 134.7 530.8 801.2 682.8 654.3 967.8 1360.9 1625.3 1751.6 2861
The export of agricultural products such as tea has decreased during 1990-91 to 2008-09 periods. For primary products, overall the exports
increased to 5 times during same period, for agricultural products it increased but not in the same trend. Total exports increased in the post WTO
period as well as in the Pre WTO period not in linear trend (ref Table: 5.8).
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Table: 5.8 Exports of Principal Commodities – US Million Dollar (Cont…) Table: 5.8 Exports of Principal Commodities – US Million Dollar (Cont…)
Source: Directorate General of Commercial Intelligence and Statistics. 2007 & RBI Handbook, 2008
Commodity/Year 1990-91 1995-96 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
B. Ores and minerals 969.6 1174.9 1153 1262.4 1996 2368.7 5078.6 6163.6 7002.5 9119.8
II. Manufactured goods 12996.4 23747 34335.2 33369.7 40244.5 48492.1 60730.7 72562.8 84920.6 102944
A. Leather and manufactures 1449.2 1752.2 1944.4 1910.1 1848.3 2163 2421.6 2697.7 3016.7 3502.5
B. Chemicals and Related products 1728 3597 5885.9 6051.8 7455.3 9445.9 12443.7 14769.5 17335.5 21176.7
C. Engineering goods 2250.4 4391 6818.6 6957.8 9033 12405.4 17348.3 21718.8 29567.2 37352.8
D. Textile and textile products 4342.6 8031.6 11285 10206.5 11617 12791.5 13555.3 16402.1 17373.2 19420.1
E. Gems and jewellery 2924.1 5274.8 7384 7306.3 9029.9 10573.3 13761.8 15529.1 15977 19678.7
F. Handicrafts (excluding handmade carpets)
223.9 433.9 661.5 549 785.3 499.7 377.4 462 438 508.2
G. Other manufactured goods 78.2 266.5 355.8 388.3 475.6 613.3 822.6 983.7 1213 1304.5
III. Petroleum products 522.7 453.7 1869.7 2119.1 2576.5 3568.4 6989.3 11639.6 18678.7 28363.1
IV. Others 302.2 337.3 1229.2 1174.3 1192.3 1880.3 2262.6 2510.7 3128.8 4302.1
Total exports 18145.2 31794.9 44560.3 43826.7 52719.4 63842.6 83535.9 103091 126414 163132
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Trends in export show that India has not been able to maintain steady flow of export of
commodities like non-basmati rice, wheat, cotton, sugar. In the post WTO period export of
oil, groundnut, spices, tea, and coffee has been affected adversely. In the case of high value
horticultural and livestock products, exports, in general, maintained rising trend even during
the post WTO period of depressed international prices.
Export of guar gum meal, castor oil shows the possibility of exploiting inches in export.
Trend in export of castor oil is a pointer to the important role of technology that enabled India
to raise castor yield in some states, which equipped it with advantage in export. Uncertain
production in agriculture is also due to its dependence on monsoon; however, exports from
agricultural sector depend on surplus production and policy of Government regarding
exports.
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Table: 5.9 Exports of Principal Commodities - Rupees (Rupees Crore)
Commodity/Year 1990-91
1995-96
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07
2007-08
I. Primary products 7758.4 24274 32556 34164.6 42133.3 45500.4 60896.9 72508.4 89078 110811 A. Agriculture and allied products 6018.7 20344 27288 28144 32473.3 34615.7 38078.1 45220.1 57392 74094.3 1. Tea 1070.1 1171.1 1789 1719.2 1652.1 1637.4 1840.3 1730.7 1969.5 2034.2 2. Coffee 252.2 1502.9 1185 1094.9 994 1085.9 1069.1 1588.7 1969 1872.3 3. Rice 461.6 4568.1 2932 3174.1 5831.2 4168 6768.9 6221.3 7035.9 11750.9 4. Wheat 31.1 366.8 415.1 1330.2 1759.9 2391.2 1459.8 557.5 35.4 0.2 5. Cotton raw including waste 845.9 203.5 221.1 42.7 50.3 942.4 422.6 2904.4 6107.8 8865.4 6. Tobacco 263.4 446.8 867.2 807.7 1022.9 1096.5 1254.6 1330.7 1685.2 1931.9 7. Cashew including cashew nut shell liquid 447 1237.2 2054 1793.9 2061.5 1704.8 2489.1 2593.4 2506.5 2234.8
8. Spices 233.9 793.5 1618 1497 1655.5 1544.2 1883.2 2116 3157.9 4204.5 9. Oil meals 608.5 2348.6 2045 2262.9 1487.4 3348.4 3177.6 4875 5504.3 8140.5 10. Fruits and vegetables 213.3 527.6 843.3 1054.6 1188.1 1791.6 1791.3 2133.5 3082.1 3066.4
11. Processed fruits, juices, miscellaneous processed items 212.7 887.8 1318 1236.7 1484.2 1402.4 1277.2 1589.4 1836.4 2135.8
12. Marine products 960 3381.1 6367 5898.3 6928.1 6105.6 6469.2 7035.9 8001 6926.7 13. Sugar and mollases 37.6 506.4 505.1 1781.9 1814.5 1236 155.1 597.9 3260.8 5662.8 14. Meat and meat preparations 139.8 627 1470 1193.3 1377.2 1714.4 1905.3 2750.2 3314 3749.5 15. Others 241.7 1775.6 3660 3256.5 3166.6 4447.2 6114.9 7195.6 7926.1 11518.4
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Table: 5.9 Exports of Principal Commodities-Rupees (Rupees Crore) (Contd…)
Source: Directorate General of Commercial Intelligence and Statistics. 2007 & RBI Handbook
Commodity/Year 1990-91 1995-96 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
B. Ores and minerals 1739.7 3930.1 5267.4 6020.6 9659.9 10884.6 22818.8 27288.3 31686 36716.9
II. Manufactured goods 23319.1 79433.3 156858.4 159146.4 194764.5 222828.8 272872.2 321260.8 384261.4 414457.7
A. Leather and manufactures 2600.3 5861.2 8883.1 9109.8 8945 9939.4 10880.6 11943.5 13650.4 14101.3
B. Chemicals and Related products 3100.5 12032 26889.2 28862 36080.3 43405.5 55911.4 65389.8 78442.1 85258.7
C. Engineering goods 4037.8 14687.7 31150.4 33182.9 43715.4 57004.9 77948.7 96156.9 133790.1 150384.9
D. Textile and textile products 7791.8 26865.4 51554.7 48676.6 56220.8 58778.8 60905.8 72617.8 78612.9 78186.6
E. Gems and jewellery 5246.7 17644.2 33733.4 34845.1 43700.7 48586.1 61833.7 68752.6 72295.2 79227.7
F. Handicrafts (excluding handmade carpets)
401.7 1451.5 3022.1 2618.1 3800.6 2296.1 1695.8 2045.3 1981.9 2046.2
G. Other manufactured goods 140.4 891.4 1625.6 1852 2301.7 2818.1 3696.3 4355 5488.8 5252.3
III. Petroleum products 937.8 1517.8 8541.7 10106.6 12469.2 16397.4 31404.2 51532.8 84520.1 114191.7
IV. Others 542.3 1128.2 5615.4 5600.4 5770.3 8640.1 10166.3 11115.9 13919.7 16402.9
Total exports 32557.6 106353.3 203571 209018 255137.3 293366.8 375339.5 456417.9 571779.3 655863.5
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The table 5.9 shows exports of principal commodities, in terms of rupees. India’s primary
products export during 1990-91 was Rs. 7758.4 crore recorded increase to Rs. 24274.1 crore in
1995-96. The export has finally reached to Rs. 110811 crore in 2007-08. Marine products export
during 1990-91 was Rs. 960 crore recorded a increases to Rs. 3381 crore in 1995-96. The export
has finally reached to Rs. 6926.7 Crore in 2007-08. Manufactured goods export during 1990-91
was Rs. 23319 crore recorded a increases to Rs. 79433 crore in 1995-96. The export has finally
reached to Rs. 414458 crore in 2007-08. Petroleum products export during 1990-91 was Rs.
937.8 crore recorded a increases to Rs. 1517.8 crore in 1995-96. The export has finally reached
to Rs. 114192 crore in 2007-08.
The issue of export promotion is particularly relevant at the present time when Indian economic
policies are undergoing a process of substantial reconsideration and revision.21 A commodity
wise export data as per (DGCIS) reveals that manufactured goods continued to maintain the
largest share at 67.2 percent followed by petroleum products 14.7 per cent and primary products
13.9 per cent. Above all the share of manufactured goods has increased along with the decrease
in share of petroleum products and primary products. Exports were largely neglected during the
first and second five-year plans, which were justified on the ground that demand for India export
was inelastic. In Table 5.8 shows export of India’s agriculture and allied products exports in
1990-91 was 6018.7 crore during 1995-96 it has reached to 20344 crore, but in the year 2001-
02 it reach to 27228.2 crore, finally 74094.3 crore in 2007-08. Among the primary products,
agriculture and allied products showed a decline of 4.9 per cent as against a high growth of 45.3
per cent during the year. Slowdown in agricultural and allied products export was mainly due to
the decline in exports of rice, cotton, marine products sugar and molasses and deceleration in
export growth of tea, coffee, and oil meal. Ores and minerals export declined by 14.5 per cent
during this period.
21 Export optimi sm and import liberalization Economic and political weekly vol. 20. (Jayati Ghosh Jan 198 5.)
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Table 5.10 India’s Exports of Principal Commodities Percentage share
Commodity Group 2006-
07
2007-
08
2008-
09
I Primary Products 15.6 16.9 13.9
Agri & Allied
products
10.0 11.3 9.6
Ores &Minerals 5.5 5.6 4.3
II Manufactured
Goods
67.2 63.2 67.2
Leather &
Manufacture
2.4 2.2 1.9
Chemical &
Related Products
13.7 13.0 12.4
Engineering Goods 23.4 22.9 25.9
Textiles & Textile
products
13.7 11.9 11.0
Gems & Jewelry 12.6 12.1 15.2
III Petroleum
Products
14.7 17.4 14.7
IV Others 2.5 2.5 4.2
Total Exports 100.00 100.00 100.00 Source: RBI Bulletin Nov2009
The table 5.10 shows that during 2008-09, exports of major commodity groups slowed down,
engineering goods showed a marginal growth, Gems and Jewelry showed substantially
accelerated growth. Export of agriculture and allied products, ores and minerals and petroleum
products declined. Leather, manufacture and textile products showed deceleration. Export of
manufactured goods showed a deceleration of 19.3 per cent from 21.3 per cent in the previous
year. Among manufactured goods export of engineering goods which was the largest item in
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India’s export comprising of transport equipment, iron & steel and electronic goods showed a
marginal increase of 26.5 per cent as it was 25.4 percent a year ago.
The share of engineering goods in total export has increased remarkably from 22.9 per cent to
25.9 per cent as a result of high growth manufactured by engineering goods in contrast with slow
down in most of other commodity groups. Chemicals and related products exports during 2008-
09 at US$ 22.6 billion showed a moderate growth of 6.8percent from 22.3percent during 2007-
08. Exports of textiles and textile products showed a sharp moderation in growth to 3.0 percent
from 11.8 percent. Gems and Jewelry exports during 2008-09 at US$ 27.7 billion recorded an
accelerated growth of 40.8 percent, as it was 23.2 percent. This is evidence of recessionary
condition prevailing in export destination of the country.
Table 5.11 India's Share in world Export (in US million dollar (1990-2008)
Commodity Year
1990
1995 2000 2007 2008 Meat & Preparation 0.2 0.7 0.9 1.1
Fish Preparation 1.6 2.7 2 1.7
Rice 6.4 10.2 17.8 14.3
Vegetable &fruits 0.8 1.3 1.1 1.2
Sugar &prep 0.1 0.9 3.6 4.8
Coffee substitute 1.7 2.3 1.9 2
Tea 22.1 14 8.6 9
Spices 7.7 10.3 14 14.5
U/M Tobacco 2.1 2.7 3.8 5.3
M Tobacco 0.3 0 0 0
Oilseeds 0.8 1.7 1.8 1.5
Iron ores 7.6 3.9 11.5 8.6
Medicine Pharmacy 1.2 1.2 1 0.9
Leather 4.8 2.3 3.1 3.5
Woven cotton fabrics 3.7 4.9 3.2 3.6
Pearls &stone 9.8 12 13 13
Total 0.5 0.7 1.1 1.1
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Source: United Nation: 2008, International Trade Statistics, Year Book, &Economic Survey 2010-11,
UN2009
However, during post-WTO period (1995-2008), the average share of edible oils increased to
45.4 per cent in India's agricultural imports. But the share of other items, i.e. pulses, cashew nuts,
sugar, wheat and cereal preparations, diminished marginally. India’s agricultural imports on an
average during post-WTO period. The major items, whose imports have been increased during
post-WTO period, were edible vegetable oils, spices, raw cotton, and raw jute. The share of these
four items in India's agro imports increased from 18.1 per cent during pre-WTO period to 54.6
per cent during post-WTO period on an average per annum. In fact, edible oils constituted more
than 50 per cent in India's agricultural imports during 1998-2004, except 2001-02. The major
items, whose share has been increased during post-WTO period, were rice other than basmati,
pulses, wheat, spices, groundnut, guar gum meal, castor oil, and sugar. On the other hand, the
share of agricultural products in India's global imports during post-WTO period has been
increased to 6.1 per cent-on an average per annum, as compared to 4 per cent during pre-WTO
period. The major items, whose share has been increased in India's global imports during post-
WTO period, were edible vegetable oils, raw cotton and spices. Thus, it is revealed that during
post-WTO period, India's global agricultural exports have diminished marginally; rather her
global agricultural imports have been increased.
The most important determinant of the distribution of gains from trade is the Terms of Trade.
Terms of trade are the important measure of gains to individual country from international trade.
During post-WTO period the gains from trade may not be evenly distributed among WTO
members. Table 5.11 shows that India enjoyed favorable terms of trade during pre-WTO period
(1990-95) except for 1991-92, when new economic policy of liberalization was launched. During
1991-92, export unit value of coffee, tobacco and sugar was cheap and import unit value of rice
and milk and cream was higher. India's commodity terms of trade were turned out to be highly
favorable during 1994-95. On an average per annum during pre-WTO period, India's agricultural
terms of trade were favorable by 18.6 per cent. During post-WTO period also, India enjoyed
favorable agricultural terms of trade except for 1995-96, when import prices of edible oils,
cashew nuts and raw cotton were higher. However, India experienced favorable agricultural
terms of trade during 1996-2004. On an average per annum during post-WTO period, India
enjoyed favorable agricultural terms of trade by 11.15 per cent, as the export unit value index
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was higher by 52.74 per cent, but the import unit value index was higher by 37.42 per cent.
Nevertheless, on an average per annum, the gains from agricultural trade were lower during the
post-WTO period, as compared to Pre-WTO period. On the whole, it can be said that India's
agricultural terms of trade have not deteriorated. Rather, India has marginally gained in her
global agricultural trade during the post-WTO period. But the gains from agricultural trade in the
post-WTO regime have been much less than expected.
5.5 Imports of Principal Commodities
Trends in India's Imports
The trends in India's imports for the period 1990-91 and 1995-96 as compared with the
corresponding period of the previous year are reflected in Import of items under bulk category as
a whole comprising inter-alia Fertilizers, Cereals, Sugar, Edible Oil, Iron and Steel and
Petroleum Crude and Products recorded a substantial increase during 2003-2004 compared with
the corresponding period of the previous year. It is notable that the commodity group recording
the highest growth in imports was Machinery. India’s Bulk Imports during 1990-91 was US$
10848 Million recorded increases to US$ 14314 Million in 1995-96. The export has finally
reached to US$ 112749 Million in2007-08. As far as import of individual items is concerned,
significant growth was registered by Paper Board and Manufactures (47.59percent) followed by
Iron & Steel (43.76 percent), Crude Rubber including Synthetic (43.31 percent), Edible Oil
(36.71 percent), Non-ferrous Metals (33.07 percent), News Print (29.72 percent), Fertilizer
(15.60 percent) Pulp & Paper Waste (13.76 percent), Metalli ferrous Ore & Scrap (11.66 percent)
and Petroleum Crude and Products (4.44 percent). India’s non-bulk Imports during 1990-91 was
US$ 13224 Million recorded a increases to US$ 22361 Million in 1995-96. The export has
finally reached to US$ 138691Million in2007-08 (table: 5.12). Import of some items during this
period registered a fall. These included Crude oil, Fertilizer (25.55 percent). Import of Rice &
Wheat came down to nil during the period under review. Imports of food and related items
increased at a very sharp rate during post WTO period also, which raised the imports from $ 1.1
billion in 1995-96 to $2.7 billion during 1998-99. In the last two years some check has been put
on these imports
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Table: 5.12 Imports of Principal Commodities - Us Dollar
Commodity/Year 1990-91 1995-96 2000-01 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08
I. Bulk imports 10848 14314 20816 20263.1 24299.5 29461.5 42400.7 61086.1 84434.2 112748.5
A. Petroleum, crude and products 6028.1 7525.8 15650 14000.3 17639.5 20569.5 29844.1 43963.1 57143.6 79644.5
B. Bulk consumption goods 556.5 969.7 1443 2043.2 2411 3072.8 3104.6 2766.6 4294.2 4599.4
C. Other bulk items 4263.3 5818.9 3722 4219.6 4249 5819.2 9452 14356.5 22996.5 28504.6
II. Non-bulk imports 13224.6 22361 29721 31150.2 37112.6 48687.6 69116.7 88079.6 101315 138690.7
A. Capital goods 5835.6 10330 8941 9882.2 13498.2 18278.9 25135 37666.2 47069.2 70840.6
B. Mainly export related items 3680 5257.5 8059 8260 10313.7 12716.8 17095.5 18641 17871.7 20783.5
C. Others 3709 6773.3 12721 13008 13300.7 17691.9 26886.2 31772.4 36374.2 47066.5
Total imports 42217.7 36675 50537 51413.3 61412.1 78149.1 111517 149165.7 185735 251654
Source: Directorate General of Commercial Intelligence and Statistics. 2007 & RBI Handbook,2008
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Thus, Import of edible oil accounts for major increase, in food import. Till 1994-95 import of
edible oil did not exceed $200 million. During 1998-99 and 1999-2000, edible oil import has
risen to more than $1.8 billion (Ref. table 5.12). This has raised Indian’s dependence on import
for edible oil close to 40 per cent and is causing adverse impact on domestic oilseed growers.
Import of cotton (raw and waste) has also witnessed quantum jump after 1998-99. Despite
having large surplus of sugar for export, India witnessed import shock whenever tariffs on sugar
imports were low. The trend in India’s import and export during reforms period, show that,
decline in India’s agricultural exports after 1997, is consistent with the trend in global trade in
agricultural products largely attributable to decline in the international prices. However, India’s
farm imports rose sharply during post WTO period despite decline in global agricultural trade.
Thus India’s agricultural imports during post WTO period did not follow the trend in the global
trade. Second, in the post WTO period trade liberalization has led to sharp rise in import of
edible oil and cotton. Horticulture sub sector has seen favorable impact on export during the
decade of reforms.
5.6 Import by major product categories:
During the year 1990 the total import of Fertilizers increased to Rs. 2742 crores from Rs. 2372
crores in the corresponding period of 1995 recording an increase of 15.60 percent. However
import of Crude Fertilizer decreased by 25.55 percent. The import of Petroleum Crude &
Products was valued at Rs. 67920 crores during 2001-05 as against Rs. 62059 crores during
2005-2008 showing a growth of 9.44 percent. Import of Pearls and Precious and Semi-precious
Stones increased by 5.55 percent to Rs. 23109 crores during year 1990 as compared to Rs. 21893
crores during the corresponding period of the previous year. Import of Capital Goods, largely
represented by machinery, including Transport Equipment as well as Project Goods recorded a
notable increase during year 1990 over the same period of last year. Machine Tools segment saw
a significant rise of 64.03 percent in imports. Import of Project Goods, however, decreased from
Rs. 1807 crores in year 1990 to Rs. 1221 crores in year 1990 registering a fall of 32.43 percent.
Other items that showed positive import growth were Transport Equipments (62.06 percent)
Non-Electrical Machinery (24.17 percent), Electric Machinery (19.34 percent), and Professional
Instruments (1.56 percent). Organic and Inorganic Chemical Materials and Medicinal and
Pharmaceuticals Products constituted the major components of imports under this category. The
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imports of organic and inorganic chemicals increased to Rs. 13,149 crores during year 1990 from
Rs. 10,794 crores during year 1990, registering a growth of 21.82 percent. Import of medicinal
and pharmaceutical products marginally declined to Rs. 2073 crores during year 1990 from
Rs.2087 crores during the corresponding period of last year registering a fall of 0.67 percent. The
total import of sensitive items for the period 2006 has been Rs 14,472 crore as compared to Rs
12,959 crore during the corresponding period last year thereby showing an increase of 11.7 per
cent. The gross import of all commodities during same period of current year was Rs 598287
crore as compared to Rs 46,4866 crore during the same period of last year. Thus import of
sensitive items constitutes 2.8 per cent and 2.4 per cent of the gross imports during last year and
current year respectively. Imports of fruits & vegetables (including nuts), cotton & silk, spices
and tea & coffee have shown a decline at broad group level during the period. Imports of items
viz. edible oil, food grains, products of SSI, rubber, marble & Granite, Alcoholic beverages and
milk & milk products have shown increase during the period under reference. In the edible oil
segment, the imports have increased from Rs 6,753 crores last year to Rs 7,558 crores for the
corresponding period of this year. A significant feature of edible oil import is that import of
crude oil has gone up by 20.5 per cent and that of refined oil have gone down by 44.9 per cent.
The growth in edible oil import is mainly due to significant increase in import of Crude Palm Oil
and its fractions, which has gone up by 44 per cent.
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Table: 5.13 shows Imports of bulk commodities –in terms of rupees during 1990-91 was Rs.
19,464.3 crore recorded a increases to 47881.1 crore in 1995-96. The export has finally reached
to Rs. 453933 crore in 2007-08. Non-bulk products Imports during 1990-91 were Rs.
23,728crore recorded a increases to Rs. 74,797 crore in 1995-96. The export has finally reached
to Rs. 55,8,378 crore in 2007-08.
5.7 Composition of India’s Import
Financial crisis in U.S., which began in the second quarter of 2007, adversely affected India's
merchandise exports to U.S. with negative effects becoming pronounced from october 2008
onwards. A likely explanation for this lag is that India's exports grew at a much higher rate to the
world as compared to US since 2005. Also, the share of U.S. in India's exports has declined over
the years. India’s export basket in terms of its composition has diversified over time and shares
of traditional exports have declined in the export basket. This has led to reduced dependence on
few exportable products and helped moderate the impact of reduced demand of exports.
However, there exists large scope for further diversification.
Over a period of time, the significance of South-South trade for India is increasing with the share
of developing countries increasing from 17 percent in 1990-91 to 42 percent in 2007-08. In
particular, the direction of India's exports is slowly shifting towards Asian developing countries.
However, developed countries, like EU and US, are still India's major export markets. In terms
of exports of services, there has been exponential rise overtime with CAGR of about 24percent
during 2001-2008. U.S. remains the major export market for India's services and software
exports remain the major exportable service with 40percent share. India's import growth has
declined during the slowdown but the decline has been lower than the decline in exports. Non-oil
import growth declined from 29 percent in 2005-06 to 13 percent in 2007-08 while oil imports
declined from 47percent in 2005-06 to 17 percent in 2008-09. Unlike growth rate of exports, the
growth rate of imports has remained positive. Agricultural trade during 2008-09 shows a healthy
balance, which can be boosted further if the export of traditional and new agricultural products
like marine products, rice (basmati), other cereals, tea, coffee, cashew nuts, oil meals,
floriculture, cotton, Niger seed, etc., can be increased further.
The post Uruguay round experience has been a mixed one for agricultural trade in India. While
exports in certain areas, have registered a high growth, in certain other areas, the growth rate has
129 | P a g e
not been satisfactory. Exports of rice (basmati and non-basmati), coffee, tobacco, dairy and
poultry products, spices, groundnut, guar gum meal, oil meal, fresh fruits and vegetables, meat
and its preparations, raw cotton including waste, and paper/wood products have shown
significant growth. Exports of pulses, castor oil, and marine products have not shown significant
growth. At the global level, average bound tariffs have been reduced in the Uruguay round
However, measures like, tariff escalation, variable Tariffs, complex tariffs and also certain
nontechnical barriers still persist. Domestic support and export subsidies continue to remain high
in a few developed countries. For most high-value agricultural products, including fruits and
vegetables, fish, beef, poultry products, and Spices, many importing countries have developed
new standards, besides tightening existing standards. These factors have acted as inhibiting
forces in actualizing the export growth potential of the country. Other factors that have led to
limited exports include infrastructure inadequacies, poor quality awareness, and poor post-
harvest management. Globalization has led to increased competition from international markets
and pressure to dismantle protectionist instruments. Since agriculture in India is more a matter of
livelihood than a commercial venture, it is necessary to build capacities in the system so that it is
able to withstand the forces of globalization and compete wherever possible. While there are a
large number of issues to be addressed at the micro and macro levels, the Capacity Building to
Enhance the Competitiveness of Indian Agriculture and Registration of Organic Products Abroad
scheme aims to address some of the limited micro-level capacity creation issues. The capacity
building under this scheme may be in the form of academic, relevant research, market surveys
(domestic and international), or in the form of creation of physical assets critical to agriculture in
the international context.
The EC-India Joint Working Group on Agriculture and Marine Products has been setup in the
Department of Agriculture and Cooperation for facilitating and promoting agricultural trade
between India and the European Union. The 3rd meeting of the Joint Working Group was held in
New Delhi on 14October 2009 to discuss agricultural policies, growth in bilateral trade, and
issues of mutual interest related to agricultural trade.11.9 Negotiations on PTAs/FTAs are at
various stages of progress with MERCOSUR (Brazil, Argentina, Paraguay, and Uruguay),
BIMSTEC (Bangladesh, Bhutan, Myanmar, Nepal, Sri Lanka and Thailand), the Gulf
Cooperation Council (Kuwait, Bahrain, Qatar, Oman, Saudi Arabia, and the United Arab
Emirates), Thailand, and the European Union. India has signed the Trade in Goods Agreement
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with ASEAN countries and comprehensive Economic Partnership Agreement with South Korea
in 2009. Agricultural commodities which are vulnerable to global competition and which are
crucial for food and livelihood security have been kept out of the purview of these agreements.
Besides, stringent rules of origin norms and built-in safeguards have been put in place to protect
the interest of farmers.
5.8 India’s Agriculture Export –Import
Agriculture and allied products comprises a wide variety of agricultural products covering
Cereals, Pulses, Tobacco, Spices, Nuts and Seeds, Oil Meals, Guargum Meals, Castor Oil,
Shellac, Sugar and Molasses, Processed Food, Meat and Meat Products, etc. During 1990-2008
the exports of this group recorded an increase of Rs. 6018.7 crores to Rs. 74094.3 crores Cereals
(except Rice) Groundnuts, Guar gum Meals, Shellac, Processed Food & Spirit & Beverages
registered growth in exports. The exports of Marine Products stood at Rs. 960 crores during
1990-91 recording a decline of 11.7 percent over Rs. 6926 crores during 2007-2008. The USA,
EU and Japan continued to be the major destination of marine exports from India. As regards the
composition of India's global agricultural trade, the major items of her exports were oil meals,
tea, coffee, rice, cashew, raw cotton, spices, fruits and vegetables, marine products, etc. The
major items of her agricultural imports were edible oils, cashew nuts, pulses, wheat, sugar, raw
cotton, etc. As per economic review 2009, the share of major items in India's agricultural trade
during pre-WTO and post-WTO period. During pre-WTO period, the major export items and
their respective share in total exports were Meat & prep 0.2 percent and 0.7 percent in the year
1990 & 2000 finally it stood at 1.1 percent during the year 2008, oil seeds 0.8 percent share it
reached to 1.5 percent share in 2008, Tea’s percentage share in 1990 was 22.1 percent, it
reached to 14, & 9 percent during the year 2000 and 2008. In case of rice 6.4 percent&10.2
percent and 1.1 percent in the same period, coffee percentage share in1990 was 1.7, it reached
to 2.3 &2 percent during the year 2000 and 2008. Spices export was in said period
7.7,10.3and14.5percent Tobacco both Manu and u/Manu together share was 2.4 during 1990 in
the year 2000 it marginally gain of .3 percent oil seeds exports share was 0.8 percent during the
year 1990 it has reach to 1.5percen in year 2008. These eight items accounted for 78.9 per cent in
India's agricultural exports during 1990-95 on an average per annum. However, the situation
changed during post-WTO period. During 1995-2004, the share of these eight major items in
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India's agricultural exports diminished to 67 percent on an average per annum. Whose exports
have been increased during the post-WTO period, were rice other than basmati, pulses, wheat,
coffee, spices, sesamum seed, groundnut, guar gum meal, castor oil and sugar. The share of these
ten items in India's global agricultural exports increased from 17.9 per cent during pre-WTO
period to 32.7 per cent during post-WTO period on an average per annum. The removal of export
restrictions on rice in 1994 has been a factor in growth of rice exports during post-WTO period.
5.9 India’s Total Exports vs. Agri Exports (US Billion Dollars)
India’s total exports vs agri exports has shown in Table 4.14 by the figure it was clearly seen
that, Export of agriculture products increased from US$ 6.0 bn in 2000-01 to US$ 11.2 bn in
2006-07. However, the share of agriculture and allied products in total exports has come down
from 13.6 percent to 8.9 percent during the same period. During the period 2000-01 to 2006-07,
India’s overall exports grew faster than agro exports.
Table 5.14 India’s Total exports vs. Agriculture exports
Year Total export Agri and allied Export
Growth in Total export
Growth in Agri and allied
Export 2000-01 44.1 6.0 20.1 6.6 2001-02 43.8 5.9 -1.7 -0.7 2002-03 52.7 6.7 20.3 13.6 2003-04 63.8 7.6 21.1 13.4 2004-05 83.5 8.4 30.9 10.5 2005-06 103.1 9.6 23.5 14.3 2006-07 126.3 11.2 22.5 16.7
Source: CMIE, India Trade data base, 2008
India is among the 15 leading exporters of agricultural products in the world. As per
International Trade Statistics, 2009, published by the WTO, India's agricultural exports
amounted to US$ 21.37 billion, with a share of 1.6 per cent of world trade in agriculture in 2008.
Agricultural exports have shown an increasing trend. Agricultural exports have increased from
Rs. 79,039.72 crore in 2007-08 to Rs. 85,961.82 crore in 2008-09, registering a growth of about
8.76 percent
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The most significant positive aspect of our agricultural exports is that a majority of the items in
the agriculture export are net foreign exchange earners, with negligible import content unlike
high import content in many manufactured products. Export of agriculture products increased
from US$ 6.0 bn in 2000-0 1 to US$ 11.2 bn in 2006-07. However, the share of agriculture and
allied products in total exports has come down from 13.6percen to 8.9% during the same period
(Ref Table 5.14). During the period 2000-01 to 2006-07, India’s overall exports grew faster than
agro exports. The difference has always been substantial except in 2001-02 where both
experienced negative growths.
India’s major agro exports (apart from marine products) include rice, oil meals, cashew, spices,
tea, and wheat. The non-traditional exports include horticulture and floriculture products such as
vegetables, fruits and their processed products. Star performers have in fact been the traditional
agro exports like basmati rice, oil meals and castor oil. To be precise, share of oil meals in
India’s agriculture exports jumped to 8.6percen in 2004-05 from 4.6percent during 2001-02.
Share of basmati rice also shot up from 6.3percent to 7.6 percent during the same period. This
was due to a significant average growth rates experienced over the last three years of 62 percent
and 22 percent, respectively. This trend clearly reflects increasing importance of traditional agro
exports, necessitating the need to diversify into non-traditional export products.
5.10 Direction of India’s Agricultural Exports
The agricultural commodities from India are mainly exported to many of the developed and
emerging economies. Destination wise analysis shows that during 2008-09 developing countries
and OECD countries were the major markets for India’s export accounting for 37.6 percent, 37.4
percent share respectively. Another major contributor was OPEC with 21.2 percent shares.
Country-wise the UAE become the single largest destination for India in 2008-09 with a share of
13.1 percent in. India’s total exports by replacing the U.S which remained India’s largest export
market for a number of years UAE was followed by the US (1 1.4percent), China (5. 1 percent),
Singapore (4.5 percent), Honkong (3.6 percent) and UK (3.6 percent). The detail of India’s
direction of exports to principal countries in rupees is shown in table 5.15, Tea export was
Rs.30.1 crores during 1990-91 in 1995-96 it has reached to Rs. 131.3crores finally it stood at
286.6 for UAE in the year 2007-08,followed by Russia in the same year almost same value.
Incase of Germany the value wise export not very impressive from the year 1990-91 to 2007-08.
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Coffee was main export for India that was Rs.17 crores during 1990-91 in 1995-96it has reached
to Rs. 197.7 crores finally it stood at 464.5 for Italy in the year 2007-08,followed by Russia in
the same period Rs.146 crores to Rs.156.5 crores value. In case of USA the value wise export
from the year 1990-91 to 2007-08 was Rs 6.9 to Rs 40.5 crores.
Rice export are also very important for India, Export of rice to Bangladesh followed by Saudi
Arabia was Rs951 crores and Rs. 519crores during 1995-96 it has reached to Rs. 2646 crores &
Rs. 1433 crores. Tobacco export has second position for UAE i,e Rs 223.2 crores., during the
year 2007-08, but in 1990-91only it was Rs. 3.4 crores. First position was Belgium Rs. 17.8
crores. In 1990-91 it reached to Rs. 246.1 crores in the year 2007-08 (Ref Table 5.15).
Table: 5.15 Exports of Select Commodities to Principal Countries - Crore Rupees
Commodity 1990-
91 1995-
96 2000-
01 2001-
02 2002-
03 2003-
04 2004-
05 2005-
06 2006-
07 2007-
08
Tea
Germany 42.2 75.5 92.9 86.5 95.3 125.5 119.2 112.8 101.1 109.2
Iran 61.8 5.4 53.2 39.4 11.8 8.5 113.1 80.9 100.6 171.7
Russia 597.3 476.6 479 403 287.1 260 234 237.8 279.1 285.2
U.A.E. 30.1 131.3 270.2 238 247.4 261.9 271.8 242.2 177.4 286.6
Total 1070.1 1171.
1 1788.7 1719.2 1652.1 1637.4 1840.3 1730.7 1969.5 2034.2
Coffee
Italy 17 197.7 126.9 145.9 171.5 197.6 228.2 366.3 450.9 464.5
Russia 146.2 341 288.2 318.5 223.6 211.5 181.8 298.4 230.5 156.5
U.K. 1.1 14.2 26.9 16.3 7.3 8.6 10 12.2 12.3 10.9
U.S.A 6.9 165 78.1 50.6 22.8 17.7 32.6 24.7 38.1 40.5
Total 252.2 1502.
9 1184.9 1094.9 994 1085.9 1069.1 1588.7 1969 1872.3
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Rice
Bangladesh 0 951.8 297.6 80.9 564.9 904.3 836.7 552.6 489.3 2646.8
Saudi Arabia 143.3 519.1 1269.6 1309.4 1245 1098.2 1236 1892.9 1874.1 1433.8
Singapore 1.1 8 32.8 51.2 91.6 39.2 38.4 65.2 56.4 68.4
U.A.E. 25.7 182.7 113.2 83.9 140.7 236.5 368.5 399.9 542.4 1516.7
U.K. 38.4 119.8 306.2 196.3 208.6 223.2 284.2 228.4 228.7 320.6
Total 461.6 4568.
1 2932.2 3174.1 5831.2 4168 6768.9 6221.3 7035.9 11750.
9
Tobacco
Belgium 17.8 23.5 62 114.3 114.1 95.8 117.4 162.6 206.1 246.1
Netherlands 4 9.5 46.4 22.3 40.8 62.5 52.2 50.1 53.3 76.3
Russia 105 75.2 126.9 104.9 116.6 96 142.9 173.8 130.7 116.6
U.A.E. 3.4 23.2 70 60 103.4 107.2 72.3 98.7 166.6 223.2
Total 263.4 446.8 867.2 807.7 1022.9 1096.5 1254.6 1330.7 1685.2 1931.9
Spices
Bangladesh 19.5 43.5 70.8 50.2 49.9 62.6 76.2 47 173.6 198.8
U.A.E. 5.3 61.6 94.9 69.7 68.2 92.8 92.9 108.7 155.4 211.1
U.K. 10.5 47.2 112.6 116.1 118.7 103.1 115.7 140.1 188.2 224.9
U.S.A 38.5 172.5 344.6 345.3 380 330 387.3 457.9 591.2 830.1
Total 233.9 793.5 1617.7 1497 1655.5 1544.2 1883.2 2116 3157.9 4204.5
Source: Directorate General of Commercial Intelligence and Statistics. 2007 & RBI Handbook, 2008
UAE in the same period the value wise export was Rs. 273.8crores, In case of Netherlands the
value wise export was impressive from the year 1990-91 to 2007-08 i.e. Rs. 65.7 crores to Rs.
243.8 Crores. Marine Products export was very impressive Japan, China was major importer
from India the value of export was Rs.475 crores during 1990-91 in 1995-96it has reached to Rs.
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1393 crores finally it reduced to Rs. 1083 crores for Japan, for the same period it was. Followed
by China the value of export was in 1995-96 it was to Rs. 46 crores finally it stood at Rs.
673.2crores, exports of select commodities to principal countries - (Rupees crore) are shown
Table: 5.16. The Cashew including cashew nut shell liquid export was Rs. 57 crores during
1990-91 in 1995-96, it has reached to Rs. 349.3 crores finally it stood at Rs. 798.6 crores for
USA in the year 2007-08.
Table: 5.16 Exports of Select Commodities to Principal Countries - Rupees (Rupees crore)
Commodity 1990-91
1995-96
2000-01
2001-02
2002-03
2003-04
2004-05
2005-06
2006-07 2007-08
Cashew including cashew nut shell liquid
Netherland 65.7 209.2 380.1 255.6 248 205 320.1 410.7 378.2 243.8
SaudiArabia 0.1 11 37.7 28.5 43.3 30.6 54.9 60.8 67.1 68.4
U.A.E. 5.4 38.4 83.7 61.8 89.4 92 134.7 189.2 207.7 273.8
U.S.A 57 349.3 924.4 889.9 1086.1 828.8 1172.7 984.7 975.3 798.6
Total 447 1237.
2 2053.5 1793.9 2061.5 1704.8 2489.1 2593.4 2506.5 2234.8
Oil Meals
Indonesia 1.7 339.5 313.4 387 159.4 590.6 367.9 637.7 694.1 851.3
Korea 0 284.5 210.2 224 261.5 236.3 339.6 607.3 729.8 886.5
Thailand 30.1 213.8 158.6 349.1 17.8 275.1 216.4 289.8 364.9 615.4
Total 608.
5 2348.
6 2044.7 2262.9 1487.4 3348.4 3177.6 4875 5504.3 8140.5
Marine Products
China 0 46 529.1 404.9 571.5 408.2 495.5 666.9 516.1 673.2
Japan 475. 1393.
2329.3 1641.8 1555.2 1112.8 1225 1133.6 1278.2 1083.6
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2 1
Spain 59.7 155.9 203.8 288.2 385.8 302.4 459.3 516 569.9 633.6
U.A.E. 9.6 337.7 325.1 206.8 167.6 155.5 211.8 246.5 278.5 236
U.S.A 113.
4 329.4 1091.7 1294.1 1885.8 1888.4 1512.8 1555.8 1289.3 886.1
Total 960 3381.
1 6367.3 5898.3 6928.1 6105.6 6469.2 7035.9 8001 6926.7
Iron Ore
China 2.1 232.3 593.7 986.5 1976 3784.4 12061 14490 15083 21485
Japan 671.
5 926.2 542.9 522.8 1491.8 822.8 1125.7 1634.3 1489.7 1016.2
Korea 116.
7 158.4 101.1 97.2 253.6 123 292.1 228.5 381.5 264.4
Total 1049
.1 1721 1633.8 2033.6 4200.4 5173.3 14726 16829 17656 23400
Source: Directorate General of Commercial Intelligence and Statistics. 2007 & RBI Handbook, 2008
Table: 5.17 shows direction of foreign trade (Rupees crore) the export and import for OECD
countries during 1990-91 export was Rs. 18,3,89.3 crore & import Rs. 24712.6 crore, it has
reached to Rs 10,3,119.7 crore Rs 98,4,39.1 crore in 2001-02 further in 2007 -08 it reached to
Rs. 25,2,205 crore & Rs. 352061crore. For Eastern Europe countries during 1990-91 export
was Rs. 5819.2 crore & import was Rs. 3377.2crore it has reached to Rs 5984.2crore Rs 4515.6
crore in 2001-02 further in 2007 -08 it reached to Rs. 13622.5 crore & Rs. 21191.9crore. In
OPEC countries during 1990-91 export was Rs. 1830.9crore & import was Rs. 7040.7 crore, it
has reached to Rs 24916.5crore Rs 14144.4crore in 2001-02, further in 2007-08 it reached to
Rs.107379 crore & Rs. 306286.7crore, but in case of developing countries during 1990-91
export was Rs. 5560 crore & import Rs. 8057.1crore it has reached to Rs 64553.2 .5crore Rs
60933.3 crore in 2001-02 further in 2007 -08 ,it reached to Rs. 28, 0102 crore & Rs. 32,
4694.3 crore.
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Table: 5.17 Direction of Foreign Trade (Rupees crore)
Group/ Country 1990-91 1995-96 2000-01 2001-02
Exports Imports Exports Imports Exports Imports Exports Imports
I.OECDcountries 18389.3 24712.6 59223 64254.2 92090.3 103119.7 98439.1
A.EU 8950.8 12680.4 29129 34463.9 47560.9 48015.4 46956.9 49773.9
B.NorthAmerica 5077.1 5803.9 19487 14191.4 45508.9 15587.9 43390.9 17546.1
C.Asia and Oceania 3400.5 4825.7 8870.4 11880.7 10341.3 13633 9493.9 16857.7
D.Other OECD countries 961 1402.5 1736.5 3718.2 3826.7 14853.5 3278.1 14261.5
II.OPEC 1830.9 7040.7 10299 25570.2 22156.9 12283.6 24916.5 14144.4
III.Eastern Europe 5819.2 3377.2 4482.2 5598.7 6020.4 3884.2 5984.2 4515.6
IV.Developing countries 5560 8057.1 30768 27245 59447.1 50966.4 64553.2
A.Asia 4683.1 6050.2 24444 21494.7 45857.6 38646.7 49278.4 44185.3
a)SAARC 957.1 235.8 5755.3 858 8810.4 2128 9662.4 2725.7
b) Other Asian developing countries
3726 5814.4 18689 20636.7 37047.2 36518.7 39616 41459.7
B.Africa 706.2 1027.6 5060 3785.6 8937.8 9119 10782.8 11934.6
C.Latin American countries 720.7 170.8 1264.1 1964.7 4651.7 3200.7 4492 4813.4
V.thers/unspecified 958.2 5.3 1580.4 10 8708.7 71648.3 10444.4 67167.4
Totaltrade 32557.6 43192.9 106353 122678.1 203571 230872.8 209018 245199.7
Cont…
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Group/ Country 2002-03 2003-04 2004-05
Exports Imports Exports Imports Exports Imports
I.OECDcountries 127679 112766 136151 135888.6 163977 179680.5
A.EU 55763.3 60696 63827 67627.1 78807.9 84080.1
B.NorthAmerica 56109.7 24245.4 56306 26471.4 65746.3 34943.6
C.Asia and Oceania 11788.6 15726.2 10934 24794.5 13216.1 32295.1
D.Other OECD countries 4017.6 12098.9 5084.5 16995.7 6206.4 28361.8
II.OPEC 33318.2 16838.5 43858 25775 59342.7 45032.4
III.Eastern Europe 6040.1 5516.4 7147.3 7484.9 7998.8 11296.5
IV.Developing countries 86445.2 75923.4 104697 94509.7 141971 128523.1
A.Asia 67661.4 54704.9 84674 74762.4 112187 101461.1
a)SAARC 13183.5 2477.7 19061 3073.2 19952.7 4269.3
b) Other Asian developing countries
54477.9 52227.2 65613 71689.1 92234 97191.7
B.Africa 12465.2 16203.6 14219 14262.7 20123 17660.1
C.Latin American countries 6318.6 5014.9 5804.5 5484.6 9660.7 9401.9
V.thers/unspecified 1654.6 86161.2 1513 95449.4 2050.9 136532
Totaltrade 255137 297206 293367 359107.7 375340 501064.5
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Cont…
Group/ Country 2005-06 2006-07 2007-08
Exports Imports Exports Imports Exports Imports
I.OECDcountries 202936 229323 235333 289771.8 252205 352061.3
A.EU 99106.1 111354 116549 128651.6 132301 148201
B.NorthAmerica 81351 45932 90393 61148.1 88482.1 92565.3
C.Asia and Oceania 15249.5 40845.1 19416 53708.4 20783.9 58362.9
D.Other OECD countries 7229.2 31191.8 8975.8 46263.7 10637.8 52932
II.OPEC 67482.8 49458.4 93668 253759.3 107379 306286.7
III.Eastern Europe 8767.9 16796.7 11354 22682.6 13622.5 21191.9
IV.Developing countries 175927 167754 229705 270569.6 280102 324694.3
A.Asia 137165 134815 170190 214319.6 207251 258238.7
a)SAARC 24561.4 6257.2 29274 6820.7 38719.7 8500.6
b) Other Asian developing countries
112603 128558 140916 207499 168531 249738
B.Africa 25231.5 20994.6 40182 30785.2 50301.7 41693.1
C.Latin American countries 13530.9 11944.5 19333 25464.8 22549.6 24762.5
V.thers/unspecified 1304.5 197077 1719 3722.9 2555.5 8077.6
Totaltrade 456418 660409 571779 840506.3 655864 1012312
Source: Directorate General of Commercial Intelligence and Statistics. 2007 & RBI Handbook, 2008
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5.11 Performance of India’s Agricultural Export
Table 4.17: shows major agricultural exports and their share in total agricultural export, before
independence; India exported raw materials and foodstuffs and imported finished goods. Exports
were decreased due to partition and India announced policy of self-sufficiency. There was
neglect to traditional agricultural export and active discouragement of exports in first two plan
periods. Increase in exports was observed in 1970-71 due to export promotion policies, rise in
price etc. Stagnation in Indian Agricultural exports was observed from 1980 to 1990 due to
stagnation in world trade flow. During 1960-61 to 2008-09 whole period almost no changes in
coffee i.e. 2.5 Percentage Share, Maximum percentage reduced in case of Tea & mate i.e. 43.6
to 3.1. But all agri. & allied products export increased from 596 US $ million to 16,914 US $
million during the same period (ref table 5.18).
Table 5.18: Major Agricultural Exports and their Share in Total Agricultural Export Percentage Share, (US $ million) Commodities 1960-61 1970-71 1980-81 1990-91 2000-01 2008-09 Coffee 2.5 5.1 10.4 4.0 4.1 2.6 Tea & mate 43.6 30.4 20.7 16.9 6.2 3.1 Oil cakes 4.9 11.3 6.1 9.6 7.1 12.0 Tobacco 5.7 6.7 6.8 4.2 3.0 4.0 Cashew kernels 6.7 11.8 6.8 7.1 7.2 3.4 Spices 6.0 7.9 0.5 3.8 5.7 7.4 Sugar & Molasses 10.1 6.1 1.9 0.6 1.8 5.3 Raw Cotton 4.2 3.0 8.0 13.4 0.8 3.3 Rice - 1.1 10.8 7.3 10.2 13.0 Fish & Fish Products
1.7 6.2 10.5 15.2 22.2 8.2
Meat & Meat products
0.3 0.6 2.7 2.2 5.1 6.2
Fruits,veg & pulses 2.2 2.5 3.9 3.4 5.0 5.2 Mis. Processed items
0.3 0.6 1.7 3.4 4.5 4.5
All Agri. & allied products
596 644 2,601 3,521 6,256 16,914
Total (100.0) (100.0) (100.0) (100.0) (100.0) (100.0) CAGR - 0.78 15.0 3.07 5.92 13.24 Source: Computed from the Data obtained from Economic Survey, 2009-10
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From 1991 due to economic liberalization and trade reforms, exports show increasing trend.
Exports grew by a CAGR of 5.92 percent during 1991 to 2000. After 2001, there was increase in
agricultural exports. Exports grew by a CAGR of 13.24 percent from 2001 to2009. This growth
was due to export of cotton raw, castor oil and cereals.
India’s export was of the order of Rs 860 billion in 2008-09, as compared to Rs. 60 bn. in 1990-
91, Rs. 286 bn in 2000-01 and Rs.790 bn. In 2007-08 The agro exports from the country
constituted 18.49 percent of the total exports of India in 1990-91. This share came down to about
14.23 percent in 2000-01 and to 10.22 percent in the year 2008-09 Ref. Table4.18.
5.12 India’s Balance of Trade: Total and Agricultural
The Balance of Trade from agriculture remains always positive since 1991. The surplus
generated in agricultural trade would help enhancing non-agricultural imports, which would
promote growth in all sectors of the economy. The main destination of India’s agricultural
exports include Saudi Arabia, UAE, Bangladesh, Malaysia, USA, UK, Kuwait, Iran, Vietnam,
Indonesia etc. The products that have registered higher growth (CAGR) are-cotton raw including
waste, castor oil, other cereals, oil meals, gaur gum meal, poultry and dairy products, meat and
reparations, spices, fruits and vegetables etc. The products having high instability inexpert are
sugar, groundnut, jute, cotton raw including waste, rice other than basmati, wheat, other cereals
etc.
5.13 Trend in India’s Agricultural Exports and imports: 1990-91 to 2008-09
Total Agricultural exports show a continuous increasing trend since 1990-91 to 2008-09.
However the year 1999-2000 shows decrease in exports by 0.01percent, due to fall in export of
rice other than basmati, wheat, and cotton etc. We observe high growth of exports 1991-92,
1993-94, 1995-96, 2006-07, and 2007-08 due to rise in export of marine products, oil meal etc.,
whereas slow growth was observed in the year 1999-00, 1997-98 and 1998-99. Percentage share
of exports was maximum in the year 1995-96, 1996-97and 1997-98, and that was minimum in
2008-09. In the similar way trend analysis of 35 agricultural commodities was done to
understand the prospects of export.
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As regards imports, the years 1992-93, 1995-96, 2000-01, 2005-06 and 2008-09 show negative
growth and the growth in imports was high in the year 1994-95. Percentage share of imports was
maximum in 1998-99, 1999-2000 and minimum in 2008-09 as world prices were much higher
than Indian prices. By using least squares method to compute the regression coefficients and
through regression model we can predict exports for the given year.
For total agricultural exports the linear trend during 1990 to 2009 has been estimated to be as Y
= 3747.8 X- 4980.7
This indicates that export was rising at an annual rate of 3747.8 crores. The Compound Annual
Growth rate has been 17.92 %
During this period, besides the average annual value of export during 1990 to 2001 has been
estimated to be Rs 17962.24 & that in
y = 3747.8x - 4980.7
y = 1723.1x - 3145.2
The period 2001 to 2009 was Rs 52497.8. The standard deviation and coefficient of variation
have been estimated to be 8326.87, 46.24 respectively for 1990 to 2001, 21112.61, and 40.23
respectively for 2001-09. As regards imports, the linear trend during1990 to 2009 has been
estimated to be Y = 1723.1 X – 3145.2 which shows that imports were rising at an annual rate of
Rs.1723.1crores.
5.14 CAGR and Instability Index for Agricultural Exports 1990-09
The period from 1990-91 to 2008-09 is split into different sub-periods, viz., the period from
1990-91 to 2000-01, and from 2001-02 to 2008-09. Growth rates are used to measure the past
performance of exports of commodities (Table 4.19). The growth is analyzed by
Using Compound Growth Rate r = (Antilog b – 1) * 100
Instability can be measured by Ix = C.V. √ 1- R 2 Where, CV is the coefficient of variation and R 2 is corrected coefficient of determination of the trend function of export earnings adjusted by the number of degrees of freedom. Here for 1990-01, degrees of freedom are 10, for 2001-09 it is 7 and for 1990-09 it is 18.
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Table 5.19 CAGR and Instability Index for Agricultural Exports 1990-2009
CAGR% Instability Index
1990-2001 2001-2009 1990-2009 1990-2001 2001-2009 1990-2009
Total Agri Products 17.33 17.11 13.84 14.46 6.8 15.53
Total National Exports 18.55 21.93 17.92 9.46 2.71 9.68
Source: Calculated from secondary data.
The growth rate for total exports is higher than agricultural exports during 1990-2009. The
instability index in agricultural exports is higher than the total National exports. Therefore more
risk is observed in exports of agricultural products.
5.15 Prospects for India
India has a competitive advantage in several commodities for agricultural exports because of
self-sufficiency of inputs, relatively low labor costs and diverse agro-climatic conditions. These
factors have enabled export of several commodities such as cereals, cashew, tea, coffee, spices,
oil meals, fruits and vegetables and tobacco. An analysis of growth rates using trend analysis,
Compound Annual Growth rate and instability index reveals following trends for the last decade
Steady growth items: marine products, spices, fruits and vegetables, cashew and basmati rice.
Others that have shown high growth are sesame and Niger seeds, meat preparations and paper
and wood products. Negative growth items: Tea, coffee, shellac, nuts and seeds whose export
values have declined over this period New high growth items: Basmati rice, oil meal, castor oil,
processed fruits and juices, floriculture products, meat and meat preparations etc. Other items
with inconsistent growth: Exports of the items which have been fluctuating are sugar and
molasses, cotton raw including waste, rice other than basmati, wheat, other cereals, gaur gum
meal etc. The following products have good export potential Basmati Rice, oil meal,
Floriculture, marine products, spices, processed food, fresh vegetables, fresh fruits, poultry
products, dairy products, processed meat, etc. India can concentrate more on nontraditional
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exports. The production has to be increased, as there is huge demand for it from various
European and Gulf countries.
This position continued in 2009-10 and the first half of 2010-11. This is mainly due to India’s
exports and imports of gems and jewellery items followed by POL to the UAE. In both2009-10
and 2010-11, India’s exports to the UAE were higher than imports, while India’s exports to
China are lower than imports. The high and rising trade with the UAE may also be due to
circular trading to some extent.7.36 Export-import ratios in Table 5.20 show that among its top
15 trading partners, India had bilateral trade surplus with five countries, namely the UAE, USA,
Singapore, the UK, and Hong Kong in 2009-10and the first half of 2010-11. India’s trade deficit
with the USA and Singapore in 2007-08, turned into trade surplus thereafter. The export-import
ratio fell in 2008-09 in the case of Hong Kong, though it recovered in2009-10. India’s export-
import ratio in the case of China is not only low but has been stagnating at around 0.3 though it
increased to 0.4 in 2009-10, to again fall to 0.3 in the first half of 2010-11.7.37 The UAE has
displaced the USA as the topmost destination of India’s exports in 2008-09 and 2009-10 with an
export share of 13.2 percent and 13.4 per cent respectively. In 2009-10, India’s exports to the top
two destinations, i.e. the UAE followed by the USA, registered growth of (-) 2.1, and (-) 7.6,
percent respectively.
The top 15 trading partners increasing by 5.5 percentage points to 60.3 percentage in 2007-08
compare to 2001-01, again first half of 2010-11 it has come down to 59.8 percent. During the
year 2007-08 USA was first position, in the passage of time UAE becoming largest trading
partner followed by China during the year 2008-09.22 Table 5.19 shows India’s export from
1990-91 to 2007-08 OECD country has reduced from 56.5 percent to 38.8 percent; OPEC
countries increased the share from5.6 percent to 16.5 percent. Most interesting point is that
developing countries increased the share from 17.1 to 42.3 percent.
22 Economic survey page 169
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Table: 5.20 Share of Region/Country in India’s Exports: 1990-91 to 2007-08
Source: Estimated from RBI “Handbook of statistics on Indian Economy”, Directorate General of Commercial Intelligence and Statistic, Economic Review 2009
Group/ country 1990-91 1995-96 2000-01 2005-06 2007-08 I. OECD 56.5 55.7 52.7 44.5 38.8 A. EU 27.5 27.4 23.4 21.7 20.2 B. North America 17.8 13.8 1 Canada 0.9 1.0 1.5 1.0 0.8 2 U.S.A 14.7 17.4 20.9 16.8 13.0 C. Asia &Oceania 5.1 3.3 3.1 1 Australia 1.0 1.2 0.9 0.8 0.7 2 Japan 9.3 7.0 4.0 2.4 2.2 D. Other OECD
countries 1.9 1.6 1.7
II OPEC 5.6 9.7 10.9 14.8 16.5 1 U.A.E. 2.4 4.5 5.8 8.3 9.7
III Eastern 17.9 4.2 3.0 1.9 2.1 1. Russia 16.1 3.3 2.0 0.7 0.6 0.0 0.0 0.0
IV. Developing countries
17.1 28.9 29.2 38.5 42.3 A. Asia 14.4 23.0 22.5 30.1 31.5 a) SAARC 2.9 5.4 4.3 5.4 5.7 b) Other Asian
country 17.6 18.2 24.7 25.8
B. Africa 2.2 4.8 4.4 5.5 7.6 C. Latin American 0.5 1.2 2.3 3.0 3.2
V. Others / un-specified 2.9 1.5 4.3 0.3 0.4 Total Trade 100.0 100.0 100.0 100.0 100.0
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State-wise exports as reflected in the data on state of origin of exports of goods show clear
domination of Maharashtra and Gujarat. Tamil Nadu, Karnataka, and Andhra Pradesh fall in the
second rank of exporting States. In 2009-10, the growth of exports from all the States was
negative, except Haryana, Kerala, Goa, and Rajasthan. High negative export growth was
registered by Delhi, followed by Uttar Pradesh, West Bengal, and Karnataka. In the first half of
2010-11 export growth to all destinations was positive except for Kerala (Table 5.21). To
encourage exports outlay under the Assistance to States for Developing Export Infrastructure and
Allied Activities (ASIDE) scheme for the Eleventh Five year plan was increased to 3793 crore.
BOX 5.1 Indian Agricultural Export Restrictions
Export restrictions are one of several policy instruments the central government uses to address
food price inflation and maintain stockpiles of food to feed the poor through the Public Distribution
System. Export restrictions are of three types—export ban, minimum export prices (MEPs), and
export taxes. Export ban prohibit the export of sensitive nature of agricultural commodities,
government is required to monitor their price and availability in the economy on regular basis. This
entails ordering restrictions of import and export of various agriculture items.
Products, regardless of international and domestic price levels. MEPs are prices below which
exporters cannot sell their product, making Indian goods less competitive overseas. Export taxes
are levied on the value of exports, again making Indian product less competitive. In 2007, the
Indian government began significantly restricting exports of essential commodities as global food
prices increased and Indian strategic food reserves, or stocks, declined below government target
levels. Reportedly, these export restrictions were also imposed because of the government’s desire
to keep food prices low in the run-up to the national elections in early 2009.
Wheat. On February 9, 2007, the government banned exports of wheat and wheat products until
December 31, 2007, a prohibition that was later extended indefinitely.
Non basmati rice. Effective October 9, 2007, the government banned exports of all non basmati
rice to ensure adequate rice availability in the domestic market. On October 31, 2007, however,
because of the demands of rice exporters, the outright ban on exports was replaced by an MEP of
$425 per ton, which was later increased to $1,000 per ton on March 27, 2008. On April 1, 2008, the
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Before economic liberalization Primary sectors had more percentage share than other two sectors
in world trade. During 1990-91 Tertiary sectors high growth rate and growth trend is still
continued upto 2008-09. The growth in the agriculture sector has been the most volatile and also
the least among the three sectors. The share of total exports in the total GDP was 5.72 percent in
the year 1990-91, which increased to 13.89 percent during 2007-08. Similarly, the share of total
imports in the total GDP was 7.39 percent, which increased to 21.28 percent in the same period.
Export volume of food and food articles like rice, coffee, spices, and oilseed cake’s are in
negative growth rate.
government again banned exports.
Basmati rice. Effective March 5, 2008, an MEP of $950 per ton was imposed, which was
gradually increased to $1,200 per ton on April 1, 2008. In addition, an export tax of Rs. 8,000 per
ton was imposed at that time. On January 20, 2009, the MEP was lowered to $1,100 per ton, and
the export tax was abolished.
Corn. On March 5, 2007, the government banned exports of corn by the private sector and
channeled exports only through state trading enterprises for a period of six months. Effective July
3, 2008, the government banned exports of corn through October 15, 2008.
Vegetable oils. On March 17, 2008, the government banned exports of vegetable oils. This
prohibition was extended to March 16, 2010.
Pulses. Effective June 22, 2006, the government imposed a ban on the export of pulses, with the
exception of kabuli chana (garbanzos).
Milk and milk products. On February 9, 2007, the government imposed a ban on exports of
skimmed milk powder, skimmed milk food for babies, whole milk, whole milk for babies, and
other milk products until September 30, 2007.
Source: Aradhey, India: Oilseeds and Products, April 16, 2009, 22; Govindan, India: Grain and
Feed, February 20,2009, 15; Govindan, India: Grain and Feed, February 20, 2008, 7; and
Dhankhar, India: Dairy and Products, November 5, 2008.
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The post WTO period showed increase in ratio of imports to GDP whereas ratio of exports to
GDP for agriculture sector has decline. The post WTO period has been adverse to export but
favorable for imports. India’s manufacturing exports are highly concentrated in low-technology
goods and the share of high-technology manufactured goods in its total exports has barely
changed since the mid-1990s. Exports of traditional products from India like spices, tea and
coffee and groundnut could not maintain upward trend. But in the case of horticultural Export
maintained upward trend during post WTO period, but total export of these products is low
among the primary products, agriculture and allied products showed a decline of 4.9 per cent as
against a high growth of 45.3 per cent during the same period.
The share of agricultural products in India's global imports during post-WTO period has been
increased to 6.1 per cent per annum, as compared to 4 per cent during pre-WTO period. The
major items, whose share has been increased in India's global imports during post WTO period,
were edible vegetable oils, raw cotton and spices due to economic liberalization and trade
reforms.
Destination wise analysis shows that during 2008-09 developing countries and OECD countries
were the major markets for India’s exports accounting for 37.6 followed by OPEC. Country-wise
the UAE become the single largest destination for India in 2008-09 with a share of 13.1 percent.
During the post Uruguay round experience has been a mixed one for agricultural trade in India.
While exports in certain areas, have registered a high growth. Exports of rice (basmati and non-
basmati), coffee, tobacco, dairy and poultry products, spices, groundnut, guar gum meal, oil
meal, fresh fruits and vegetables, meat and its preparations, raw cotton including waste, and
paper/wood products have shown significant growth. Exports of pulses, castor oil, and marine
products have not shown significant growth Exports grew by a CAGR of 5.92 percent during
1991 to 2000. After 2001, there was increase in agricultural exports. Exports grew by a CAGR of
13.24 percent from 2001 to2009. State-wise exports as reflected in the data on state of origin of
exports of goods show clear domination of Maharashtra and Gujarat. How Gujarat agriculture
performed