india exports and imports

8/7/2019 India exports and imports

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India's Trade, Exports and Imports

Having been an agro-based economy, Indian trade has always been devoid of manufactured orindustrial goods. Post liberalisation, imports dominated the Indian trade scene in the form of

heavy machinery and information technology products and, thus, created an imbalance of trade.

India Trade: Exports

Indian trade was impacted by the global recession of 2007-2009. Indian exports fell from $200.9billion in 2008 to $165 billion in 2009. India ranked 22nd in the world in terms of export volume.

Being a country with a huge workforce, India has seen its trade being boosted by the productionof precious stones and metals. The various other export commodities that India exports are:

y Petroleum productsy Machineryy Iron and steely Chemicalsy Vehiclesy Apparel

Indias main export partners are:

y

UAE

y USy Chinay Singapore

The following graph shows how the above countries have contributed to the total volume:


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Indian trade has undergone massive restructuring following the 1991 liberalisation policies. Eversince, Indias exports have experienced a growth rate of 18.11%. The big surprise has been the

import sector that has experienced a growth rate of 34.30%.

India Trade: Imports

The Indian economy is headed towards becoming a developed economy and all its sectors are inneed of machinery and energy. Therefore, Indian imports are dominated by crude oil and

machines. Other imported commodities are:

y Precious stonesy Fertilizery Iron and steely Gold & Silvery ElectronicGoodsy Machinery other than Electricaly Organic & Inorganic Chemicalsy Metalliferous Ores & Productsy Coaly Transport Equipment

In 2009, total imports amounted to $253.9 billion, down from the 2008 figure of $322.3 billion.India ranked fifteenth in the world in terms of import volume.


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Indias import partners are:

y China 10.8%y SaudiArabia 6.9%y US 6.7%Uy

AE 6.7%y Iran 4.2%

The graph below shows how the above countries have contributed to total import volume:

Indian trade has undergone massive restructuring following the 1991 liberalisation policies. Eversince, Indias exports have experienced a growth rate of 18.11%. The big surprise has been theimport sector that has experienced a growth rate of 34.30%.


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International trade

India's share in the global trade, including trade in merchandise and services sector, hasincreased from 0.4% in 1980-95 to 1.1 percent in 2004 to 1.5 percent in 2006 and willcross the two percent in 2009. Foreign trade, as a percentage of GDP (in rupee terms)was over 25% in 2006, up from 14.1 percent in 1990-91.

Exports:India's chief exports include computer software, agricultural products (cashews, coffee),cotton textiles and clothing (ready-made garments, cotton yarn and textiles), gems and

jewellery, cut diamonds, handicrafts, iron ore, jute products, leather goods, shrimp, tea,and tobacco. The country also exports industrial goods, such as appliances, electronicproducts, transport equipment, light machinery as well as chemical and engineeringproducts. India imports rough diamonds, cuts them, and exports the finished gems. India'smain exports in 2005 included USA 16.7%, UAE 8.5%, China 6.6%, Singapore 5.3%, UK4.9%, Hong Kong 4.4%. India's services contributed about 35% of the total exports as of2010-11.

Total Exports by India:Source: Indian Ministry of Commerce and Industry

1997-98 2002-03 2005-06 2010-11Rs 130,101 Cr. Rs. 250,130 Cr. Rs. 454,800 Cr. Rs. 9,00,471 cr

Note:India's exports as a percentage of GDP is set to double since 1998.India's export growth is the second fastest in the world after China's.

Imports:Capital goods and fuel, each account for about a quarter of Indian imports. Other imports ofIndia include edible oils, fertilizer, food grains, iron and steel, industrial machinery,professional instruments and transportation equipment. Chemicals, precious and semi-precious stones and non-ferrous metals are the other major imports. India's main importpartners included China 7.3%, US 5.6%, Switzerland 4.7%.

Total Imports by India:Source: Indian Ministry of Commerce and Industry

1997-98 2002-03 2005-06 2007-08Rs 154,176 Cr. Rs. 297,206 Cr. Rs. 630,527 Cr. Rs. 949,133 Cr.


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Deficits:The value of India's imports is greater than the value of its exports. India uses foreign loansto finance the extra imports. With exports and earnings on the invisibles account improving,the trade deficit in 2000/01 narrowed to $5.73 billion from $12.9 billion in the year-agoperiod. Current account deficit was about US$ 3.7 billion or about 1.4 percent of GDP in1996-97, down from 3.2 percent in 1990-91.

Key Financial Indicators, 2006Source: Reserve Bank of India

Key Parameter 1997-98 2002-03 2005-06Current Account (US$)CA as a % of GDPBalance of Payment

-5.5 billion-1.4%

Rs 16,653 Cr.

+ 3.7 billion+ 0.3%Rs. 56,592 Cr.

- 10.6 billion

Rs. 65,896 Cr.

Note:India's Current Account as a % of GDP was positive for the first time in 23 years.

USTrade with its major trading partners, 2002Source: US Office of trade and Economic Analysis

(in millions of dollars)

Country Negative Trade Balance Rank

ChinaJapanCanadaMexicoGermanyIreland

ItalyTaiwanIndia

103,064.769,979.448,164.937,145.535,876.115,692.6

14,163.513,766.17,717.3

123456

7815

Note: US Exports to India $4,101.1 million and imports from India worth $11,818.3 million

USTrade deficit, 1790 - 2002Source: US Office of trade and Economic Analysis

(in millions of dollars)

Year Trade Balance ($ millions)179018001850190019501980198519901998

-3-20-295451,043-24,245-132,143-101,012-229,758


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20002002

-436,104-468,263

The key for India is to keep increasing its share in the global trade.

Summary:The macro economic reform policies were introduced by the Government of India in theindustrial, commercial and financial sectors. The trade policy reforms aimed at creating anenvironment for achieving a quick quantum jump in exports. Major changes were effected inthe Exim Policy to serve this purpose. Commodity-specific as well as country-specificliberalization measures were resorted to, to promote further exports. The commerceministry and the associated organizations were re-oriented to bring about a totally exporter-friendly climate.


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Emerging global power........

INDIA is in a recovery mode from the hugely impacted global financial meltdownsurfaced in mid-September 2008. An advance estimate of the Central StatisticalOrganization indicates to 7.2 percent GDP growth during the current fiscal year ( 2009-10), though the government expects it may even surpass the CSO estimates. Coupled

with this, the industry is sending encouraging feeler to fuel the hope for a better revivalof the economy from the onslaught of the meltdown that had impacted among othersIndia's exports like most of other countries around the world. The cumulative growth for theperiod April-December 2009-10 stands at 8.6 percent.

The growth in GDP during 2009-10, according to CSO advance estimates, is estimated at 7.2 per centas compared to the growth rate of 6.7 per cent in 2008-09.The growth rate of 7.2 per cent in GDPduring 2009-10 has been due to the growth rates of over 5 per cent in the sectors of mining &quarrying, manufacturing, electricity, gas and water supply, construction, 'trade, hotels, transportand communication', 'financing, insurance, real estate and business services', and 'community, socialand personal services.

On industry front, the Quick Estimates of Index of Industrial Production (IIP) with base 1993-94 for themonth of December 2009 have been released by the Central Statistical Organisation of the Ministry ofStatistics and Programme Implementation. The General Index stands at 331.7, which is 16.8 percenthigher as compared to the level in the month of December 2008. The cumulative growth for the period

April-December 2009-10 stands at 8.6 percent over the corresponding period of the pervious year.The Indices of Industrial Production for the Mining, Manufacturing and Electricity sectors for the monthof December 2009 stand at 206.0, 360.7, and 235.2 respectively, with the corresponding growth ratesof 9.5 percent, 18.5 percent and 5.4 percent as compared to December 2008. The cumulative growthduring April-December, 2009-10 over the corresponding period of 2008-09 in the three sectors havebeen 8.5 percent, 9.0 percent and 5.8 percent, respectively, which moved the overall growth in theGeneral Index to 8.6 percent.

India's exports during the first 10 months ( April-December, 2010) of the current fiscal (2009-10)stood at US$ 117.58 billion signifying 20.3 percent decline from US$ 147.56 billion earningsachieved during the comparable period in previous financial year. Indias exports duringDecember, 2009 were valued at US $14606 million (Rs. 68107 crore) which was 9.3 per cent higher indollar terms (4.8 per cent in Rupee terms) than the level of US $ 13368 million (Rs. 65015 crore)during December, 2008. Cumulative value of exports for the period April- December, 2009 was US $117587 million (Rs 563304 crore) as against US $ 147569 million (Rs. 652919 crore) registeringa negative growth of 20.3 per cent in Dollar terms and 13.7 per cent in Rupee terms over the sameperiod last year.

Indias imports during December, 2009 were valued at US $ 24753 million (Rs.115420 crore)representing a growth of 27 per cent in dollar terms (22 per cent in Rupee terms) over the level ofimports valued at US $ 19456 million ( Rs. 94625 crore) in December, 2008. Cumulative value ofimports for the period April- December 2009 was US $ 193829 million (Rs. 927969 crore) as againstUS $ 253809 million (Rs. 1126199 crore) registering a negative growth of 23.6 per cent in Dollarterms and 17.6 per cent in Rupee terms over the same period last year.

Oil imports during December, 2009 were valued at US $ 6536 million which was 42.8 per centhigher than oil imports valued at US $ 4578 million in the corresponding period last year. Oil importsduring April- December, 2009 were valued at US$ 56918 million which was 29.8 per cent lower thanthe oil imports of US $ 81101 million in the corresponding period last year. Non-oil imports duringDecember, 2009 were estimated at US $ 18217 million which was 22.4 per cent higher than non-oilimports of US $ 14879 million in December, 2008. Non-oil imports during April- December, 2009 were


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valued at US$136911 million which was 20.7 per cent lower than the level of such imports valued atUS$ 172708 million in April- December, 2008.

The trade deficit for April- December, 2009 was estimated at US $ 76242 million which was lower thanthe deficit of US $ 106240 million during April-December, 2008.

Its ambitious export target of US $ 200 billion for fiscal year 2008-09*

remainedunattainable. Country's achievements in the export sector fell short of that target byabout US $ 32 billion. The provisional estimates of the Federal ministry of Commerce putexports during FY 2008-09 at US $ 168.70 billion. But for this unexpected global financialcrisis, for India US $ 200 billion was an achievable export target taking into accountcountry's vibrant economy just before the crisis surfaced world over. India achieved themarked growth in exports despite appreciation of rupee, high interest rates, spiraling oilprices, slow down in major trade markets, and withdrawal of some GSP benefits to Indiaby other countries. Besides export set back, India's yet another ambitious target ofachieving 5 percent share of world trade by 2020 receives a set back, hopefullytemporarily. As a means to achieve the US $ 200-billion-target, a slew of innovativesteps had been initiated in the Foreign Trade Policy (FTP) 2004-09. But for a countrylike India having over 1.2 billion population market, the target of achieving 5 percent ofworld trade by 2020 is still achievable.

Indias first ever long term FTP was considered as a roadmap for the development ofcountrys foreign trade. The policy initiatives in the last four years had resulted inincreased trade activity and has generated additional employment of 13.6 million. Thenew FTP has more than doubled Indias exports in four years. The countrys exports in2008-09 stood at US$ 168 billion from US $ 63 billion in 2004, registering a cumulativeannual growth rate (CAGR) of 23 percent, year on year, way ahead of the averagegrowth rate of international trade. The global financial meltdown halted this growth.India's share of global merchandise trade that was 0.83 percent in 2003 rose to 1.45percent in 2008 as per WTO estimates. Country's share of global commercial servicesexport was 1.4 percent in 2003; it rose to 2.8 percent in 2008. Indias total share in

goods and services trade which was 0.92 percent in 2003 increased to 1.64 percent in2008. On the employment front, studies have suggested that nearly 14 million jobs werecreated directly or indirectly as a result of augmented exports in the last five years.

Top ten largest trading partners of India (2008-09)(In Rs, Crore)

Country Total Trade Trade Balance

China PRP 163,202 -92,676

USA 155,353 12,254

United Arab Emirates 152,668 -1934

Saudi Arabia 105,602 -64303Germany 67,602 -19497

Singapore 63,280 2934

UK 50114 524

Hong Kong 50,129 1772

Belgium 41552 -5294

Netherland 33099 19049


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Source: Federal Ministry of Commerce, Government of India

India's foreign trade in merchandize goods in fiscal 2008-09 stood at US 455 billion.Exports during this period was up 3.4 percent to total at US $ 168.704 billion overprevious fiscals US $ 163.132 billion. In Rupee (Indian currency) terms, exports stood atRs.766935 crore registering an increase of 16.9 percent over previous fiscals Rs

Rs.655863 crore. Imports in financial year 2008-09 stood at US $ 287.759 billion againstUS $ 251.654 billion in fiscal 2007-08 registering a growth of 14.3 percent. In Rupee(Indian currency) terms exports registered 29 percent growth in financial year 2008-09to stand at Rs.1305503 crore compared with Rs.1012312 crore in fiscal 2007-08.Country's trade deficit in fiscal 2008-09, according to provisional estimates of the FederalMinistry of Commerce, stands at US $ 119.055 billion which is significantly higher thanthe deficit at US $ 88.522 billion registered in fiscal 2007-08.

The short-term objective of India's new five-year Foreign Trade Policy (2009-14) thatwas announced in August, 2009 is to arrest and reverse the declining trend of exportsand to provide additional support especially to those sectors which have been hit badlyby recession in the developed world. The government intends to achieve an annual

export growth of 15 percent with an annual export target of US$ 200 billion by March2011 and around 25 percent per annum for the remaining three years ending 2014. Thegovernment's objective is to achieve an annual export growth of 15 percent with anannual export target of US$ 200 billion by March 2011. In the remaining three years ofthe new Foreign Trade Policy (2009-2014), the country should be able to come back onthe high export growth path of around 25 percent per annum, hopes country'sCommerce and Industry minister Anand Sharma.

By 2014, Indias exports of goods and services are expected to double. The long termpolicy objective for the government is to double Indias share in global trade by 2020. Inorder to meet these objectives, the government would follow a mix of policy measuresincluding fiscal incentives, institutional changes, procedural rationalization, enhancedmarket access across the world and diversification of export markets. Improvement ininfrastructure related to exports; bringing down transaction costs, and providing fullrefund of all indirect taxes and levies, would be the three pillars, which will support us toachieve this target. Endeavour will be made to see that the Goods and Services Taxrebates all indirect taxes and levies on exports.

Initiatives are being taken to diversify country's export markets and offset the inherentdisadvantage for our exporters in emerging markets of Africa, Latin America, Oceaniaand CIS countries such as credit risks, higher trade costs etc., through appropriate policyinstruments. The government has already endeavored to diversify products and marketsthrough rationalization of incentive schemes including the enhancement of incentiverates which been based on the perceived long term competitive advantage of India in aparticular product group and market. New emerging markets have been given a special

focus to enable competitive exports. This would of course be contingent upon availabilityof adequate exportable surplus for a particular product. Additional resources have beenmade available under the Market Development Assistance Scheme and Market AccessInitiative Scheme.

Incentive schemes are being rationalized to identify leading products which wouldcatalyze the next phase of export growth. As part of market expansion policy,India hassigned a Comprehensive Economic Partnership Agreement with South Korea which willgive enhanced market access to Indian exports. Besides India has also signed a Trade in


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Goods Agreement with ASEAN which will come in force from January 1, 2010, and willgive enhanced market access to several items of Indian exports. These trade agreementsare in line with Indias Look East Policy. India has also signed Preferential TradeAgreement with Mercosur.

India's Foreign Trade (2008-09)(In US$ million)

April 2008 - March 2009

EXPORTS (Including re-exports)

2007-08 163132

2008-09 168704

Year-on change over 2006-07 3.4

IMPORTS

2007-08 251654

2008-09 287759

Year-on change over 2007-08 14.3TRADE BALANCE

2007-08 --88522

2008-09 -119055

Source: DGCI&S

*India's fiscal year is March to AprilSource: Federal ministry of Commerce, Governmentof India

Indias Commerce and Industry minister Anand Sharma has told the Cairns group (acoalition of 19 agricultural exporting countries promoting free trade in agriculture) India

is committed to the successful conclusion of the Doha process through a constructiveengagement. In a recent address at a Cairns group meeting in Bali (June 8, 2009) theminister while emphasizing on the need for resumption of negotiations based on the draftreports on Agriculture and NAMA, stated that the development dimension of the Doharound must be central to all discussions and the aspirations of all developing countriesfor a fair trading regime must be recognized. The coalition includes US, Canada, Brazil,Japan, EU, South Africa, Indonesia among other countries.

"India is committed for the early resumption of the WTO Doha round negotiations, asthere is a need to have a rule-based multilateral global trading system and thegovernment will continue to take inputs from various stakeholders in the country", theCommerce minister told the industry body Confederation of Indian Industry (CII). Whilea perfect solution may be elusive, it should be possible to find a fair solution acceptableto all parties, while keeping in mind that development was central to the Doha Round, hesaid at the annual summit 2009 of the US India Business Council which was attended byUS Secretary of State Hillary Clinton. The existing level of trade and economicengagement is not commensurate with India's potential, which exists due to Indias far-reaching economic liberalization. India maintains that protectionist tendencies of somedeveloped countries in times of economic downturn would adversely impact developingcountries.


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"The principal aim of Indias negotiating strategy in the agriculture negotiations has beento protect the interests of farmers particularly with regard to their food and livelihoodsecurity. Substantial and effective reductions in domestic support and customs tariffs bydeveloped countries, while enabling developing countries to protect and promote theinterests of their low income and resource poor farmers, is a key priority for India andother developing countries in the agriculture negotiations. The flexibilities available to

developing countries including, inter-alia, lower tariff cuts than developed countries, self-designation of Special Products (SPs) which will have more flexible tariff reductioncommitments than other products and the Special Safeguard Mechanism (SSM) tosafeguard the interests of farmers in the event of surges in import volumes or a fall inprices would be utilized by India for protecting low income and resource poor farmers ofthe country...A successful conclusion of Doha round is essential to create a fair andequitable, rule-based multilateral trade regime best serves the needs of developingcountries", Jyotiraditya M. Scindia, Minister of State for Commerce & Industry toldmembers of the Upper House of Indian Parliament on July 8, 2009.


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BALANCE OF PAYMENT

Shrinking foreign trade

INDIAs trade deficit during the first nine months of fiscal 2009-10 on a balance ofpayments (BoP) basis was lower at US$ 89.51 bn compared with US$ 98.44 bn duringthe same period in fiscal 2008-09. The trade deficit on a BoP basis in Q3 (US$ 30.72billion) was, however, less than that in Q3 of 2008-09 (US$ 34.04 billion). This isrevealed in e report (India's Balance of Payments Developments during the firstquarter (October-December) of 2009-10) of the countrys central banking authorityReserve Bank of India (RBI).

The key features of Indias BoP that emerged in Q3 of fiscal 2009-10 were:(i) Exportsrecorded a growth of 13.2 per cent during Q3 of 2009-10 over the corresponding quarterof the previous year, after consecutive declines in the last four quarters.(ii) Importsregistered a growth of 2.6 per cent in Q3 of 2009-10 after recording consecutive declinesin the last three quarters.(iii) Private transfer receipts remained robust during Q3 of2009-10.(iv) Despite low trade deficit, the current account deficit was higher at US$ 12.0

billion during Q3 of 2009-10 mainly due to lower invisibles surplus.(v) The currentaccount deficit during April-December 2009 was higher at US$ 30.3 billion as comparedto US$ 27.5 billion during April-December 2008.(vi) Surplus in capital account increasedsharply to US$ 43.2 billion during April-December 2009 (US$ 5.8 billion during April-December 2008) mainly on account of large inflows under FDI, Portfolio investment, NRIdeposits and commercial loans.(vii) As the surplus in capital account exceeded thecurrent account deficit, there was a net accretion to foreign exchange reserves of US$11.3 billion during April-December 2009 (as against a drawdown of US$ 20.4 billionduring April-December 2008).

Major Items of India's Balance of Payments(US$ million)

(2007-08) (PR) (2008-09) (P)April-December

(2008-09) (PR)April-December

(2009-10) (P)

Exports 166163 175184 150520 124473

Imports 257789 294587 248967 213988

Trade Balance -91626 -119403 -98446 -89515

Invisibles, net 74592 89587 70931 59185

Current Account

Balance-17034 -29817 -27516 -30330

Capital Account* 109198 9737 7136 41630

Change in Reserves#

(+ indicatesincrease;- indicatesdecrease)

-92164 20080 20380 -11330

Including errors & omissions; # On BoP basis excluding valuation; P: Preliminary, PR: Partially revised. R: revised

SOURCE: Reserve Bank of India Report


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Invisibles

The decline in invisibles receipts, which started in the Q4 of 2008-09, continued duringQ3 of 2009-10. Invisibles receipts registered a decline of 3.1 per cent during the quarter(as against an increase of 5.4 per cent in Q3 of 2008-09) mainly on account of decline inbusiness, communication and financial services, and investment income receipts.

Although, software exports recorded a robust growth of 15.3 per cent, services exportsas a whole witnessed a decline of 12.3 per cent during the quarter as against an increaseof 11.8 per cent during the corresponding quarter of 2008-09.

Invisible receipts recorded a decline of 7.7 per cent during April-December 2009, ascompared with an increase of 22.2 per cent in the corresponding period of the previousyear, mainly due to the lower receipts under almost all components of services coupledwith lower investment income receipts.

Invisibles Payments

Invisibles payments recorded a growth of 12.9 per cent during Q3 of 2009-10, as

compared with a low growth of 2.4 per cent in Q3 of 2008-09, mainly led by increase inpayments under almost all components of services.

Invisibles payments witnessed a positive growth of 3.7 per cent in April-December 2009(10.4 per cent in April-December 2008) mainly supported by higher business,communication and financial services, and increase in payments under investmentincome account.

Invisibles Balance

Size of invisibles surplus in Q3 of 2009-10 was, however, lower than Q3 of precedingyear. Therefore, despite low trade deficit, the current account deficit was higher at US$

12.0 billion in Q3 of 2009-10 (US$ 11.7 billion in Q3 of 2008-09).

Net invisibles (invisibles receipts minus invisibles payments) stood at US$ 59.2 billionduring April-December 2009 as compared with US$ 70.9 billion during April-December2008. At this level, the invisibles surplus financed 66.1 per cent of trade deficit duringApril-December 2009 as against 72.0 per cent during April-December 2008.

Current Account Deficit

Net invisibles (invisibles receipts minus invisibles payments) stood at US$ 59.2 billionduring April-December 2009 as compared with US$ 70.9 billion during April-December2008. At this level, the invisibles surplus financed 66.1 per cent of trade deficit duringApril-December 2009 as against 72.0 per cent during April-December 2008.

Net capital flows at US$ 43.2 billion in April-December 2009 was much higher ascompared with US$ 5.8 billion in April-December 2008 mainly due to larger inflows underFDI, portfolio investments and NRI deposits

Due to lower outward FDI, the net FDI (inward FDI minus outward FDI) was higher atUS$ 16.5 billion in April-December 2009 as compared with US$ 14.3 billion in April-December 2008.


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Portfolio investment witnessed large net inflows of US$ 23.6 billion during April-December 2009 as against a net outflow of US$ 11.3 billion in April-December 2008 dueto large net FII inflows of US$ 20.5 billion.

Net external commercial borrowings (ECBs) inflow slowed down to US$ 2.3 billion inApril-December 2009 (US$ 6.9 billion in April-December 2008) mainly due to increased

repayments.

The increase in foreign exchange reserves on BoP basis (i.e., excluding valuation) wasUS$ 11.3 billion in April-December 2009 (as against a sharp decline in reserves of US$20.4 billion in April-December 2008). [A Press Release on the Sources of Variation inForeign Exchange Reserves is separately issued].

The gross disbursements of short-term trade credit was US$ 10.1 billion during Q1 of2009-10 almost same in Q1 of 2008-09. The repayments of short-term trade credits,however, were very high at US$ 13.2 billion in Q1 of 2009-10 (US$ 7.8 billion in Q1 of2008-09). As a result, there were net outflows of US$ 3.1 billion under short-term tradecredit during Q1 of 2009-10 (inflows of US$ 2.4 billion in Q1 of 2008-09)

Banking capital mainly consists of foreign assets and liabilities of commercial banks. NRIdeposits constitute major part of the foreign liabilities. Banking capital (net), includingNRI deposits, were negative at US$ 3.4 billion during Q1 of 2009-10 as against a positivenet inflow of US$ 2.7 billion during Q1 of 2008-09. Among the components of bankingcapital, NRI deposits witnessed higher inflows of US$ 1.8 billion in Q1 of 2009-10 (netinflows of US$ 0.8 billion in Q1 of 2008-09) reflecting the positive impact of the revisionsin the ceiling interest rate on NRI deposits.

Other capital includes leads and lags in exports, funds held abroad, advances receivedpending for issue of shares under FDI and other capital not included elsewhere (n.i.e.).Other capital recorded net outflows of US$ 1.6 billion in Q1 of 2009-10.

Balance of Payments (BoP)

Merchandise TradeExports

On a BoP basis, Indias merchandise exports posted a decline of 17.3 per cent in April-December 2009 (as against a high growth of 27.5 per cent in the corresponding period ofthe previous year).

INDIA's cumulative value of exports for the first 11 months of fiscal 2009-10 (April-2009 to February-2010)stood at US $ 152983 million (Rs 727345 crore) as against US $ 172379 million (Rs. 774585 crore)

registering a negative growth of 11.3 per cent in Dollar terms and 6.1 per cent in Rupee terms over the sameperiod last year. Country's cumulative value of imports for the period April, 2009- February, 2010 was US $

248401 million (Rs. 1180124 crore) as against US $ 287099 million (Rs. 1289412 crore) registering anegative growth of 13.5 per cent in Dollar terms and 8.5 per cent in Rupee terms over the same period last

year.

Oil imports during this 11-month period were valued at US$ 73230 million which was 18.2 per cent lower

than the oil imports of US $ 89492 million in the corresponding period last year. Non-oil imports during April,2009- February, 2010 were valued at US$ 175171 million which was 11.4 per cent lower than the level of

such imports valued at US$ 197607 million in April 2008- February, 2009.


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EXPORTS & IMPORTS (April-February, FY 2009-10)

In $ Million In Rs CroreExports including re-exports2008-09 172379 7745852009-10 152983 727345Growth 2009-10/2008-2009(percent) -11.3 -6.1

Imports2008-09 287099 12894122009-10 248401 1180124Growth 2009-10/2008-2009

(percent)-13.5 -8.5

Trade Balance2008-09 -114721 -5148272009-10 -95418 -452779

Figures for 2008-09 are the latest revised whereas figures for 2009-10 are provisional

The trade deficit for April 2009- February, 2010 was estimated at US $ 95418 million which was lower thanthe deficit of US $ 114721 million during April 2008 -February, 2009.

Source: Federal Ministry of Commerce, Government of India

Imports

Import payments, on a BoP basis, also remained lower recording a decline of 14.0 percent during April-December 2009 as compared with a high growth of 35.6 per cent in thecorresponding period of the previous year.

According to the DGCI&S data, exports declined by 17.3 per cent, and imports growth

was negative at 22.0 per cent led by the decline in both oil imports (a decline of 29.7 percent) and non-oil imports (a decline of 18.4 per cent) during April-December 2009.

On a BoP basis, the merchandise trade deficit decreased to US$ 89.5 billion during April-December 2009 from US$ 98.4 billion in April-December 2008 mainly on account of bothlower oil and non-oil import payments

Inflows & Outflows from NRI Deposits and Local Withdrawals(In $ million)

Inflows

Outflows

Local Withdrawals

2006-07 (R) 19914 15593 13208

2007-08 (PR) 29401 29222 18919

2008-09 (P) 37,089 32,799 20,617

2008-09 (Q1) (PR) 9063 8249 5157


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2009-10 (Q1) (P) 11172 9354 5568

P: Preliminary, PR: Partially revised. R: revised

SOURCE: Reserve Bank of India reportIndia's Balance of Payments Developments during the FirstQuarter (April-June 2009) of 2009-10

Variation in Reserves

During April-December 2009, there was an accretion to foreign exchange reserves mainlyon account of valuation gains. Also, inflows under foreign investments, Non-ResidentIndian deposits and short-term trade credits have contributed significantly to theincrease in foreign exchange reserves during April-December 2009.

On balance of payments basis (i.e., excluding valuation effects), the foreign exchangereserves increased by US$ 11,300 million during April-December 2009 as against adecline of US$ 20,380 million during April-December 2008. The valuation gains,

reflecting the depreciation of the US dollar against the major currencies, accounted forUS$ 20,185 million during April-December 2009 as compared with a valuation loss ofUS$ 33,375 million during April-December 2008. Accordingly, valuation gains duringApril-December 2009 accounted for 64.1 per cent of the total increase in foreignexchange reserves.

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india exports and imports

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