External Sector

External Trade in India

India's share in global exports and imports increased between 2004 and 2015. During this period, India's share in global exports increased from 0.8 per cent to 1.6 per cent and India's share in global imports increased from 1 per cent to 2.3 per cent. India's ranking among countries, in terms of value of exports and imports, improved from 30 and 23 respectively in 2004 to 19 and 13 respectively in 2015. However, the growth of India's exports is on a decline after 2013-14.

Petroleum products, pearl and precious stones, cotton goods, gold and precious metal jewellery, drug formulations and biologicals, marine products and spices are the principal commodities exported from India. India's total exports of Goods and Services, as a proportion of Gross Domestic Product (GDP), decreased from 23.8 per cent in 2014-15 to 20.7 per cent in 2015-16. In nominal terms, the value of India's exports declined from 1,905,011 crore in 2013-14 to 1,896,348 crore in 2014-15 and further to 1,602,414 crore in 2015-16. In other words, the value of India's exports recorded a negative growth of 15.5 per cent between 2014-15 and 2015-16. The major reasons were subdued global and domestic economic conditions as well as a downward trend in crude oil prices.

Petroleum, oil and lubricants, gold, silver and machinery are the major items of imports in India. India's imports decreased from 2,737,087 crore in 2014-15 to 2,323,786 crore in 2015-16, recording a negative growth of 15.1 per cent. India's total imports of Goods and Services, as a proportion of Gross Domestic Product (GDP), also decreased from 25.2 per cent in 2014-15 to 22 per cent in 2015-16.

In order to address the declining trend in exports, the Government of India launched a new Foreign Trade Policy (FTP) for the period 2015-20 with a focus on supporting both manufacturing and services exports and improving the ‘Ease of Doing Business'. The FTP also provides a road map to align itself with the ‘Make in India' and ‘Digital India' programmes of the Central Government.