International Business in India looks really lucrative and every passing day, it is coming up with only more possibilities.

The growth in the international business sector in India is more than 7% annually. There is scope for more improvement if only the relations with the neighboring countries are stabilized. The mind-blowing performance of the stock market in India has gathered all the more attention (in comparison to the other international bourses). India definitely stands as an opportune place to explore business possibilities, with its high-skilled manpower and budding middle class segment. With the diverse cultural setup, it is advisable not to formulate a uniform business strategy in India. Different parts of the country are well-known for its different traits. The eastern part of India is known as the 'Land of the intellectuals', whereas the southern part is known for its 'technology acumen'. On the other hand, the western part is known as the 'commercial-capital of the country', with the northern part being the hub of political power'. With such diversities in all the four segments of the country, international business opportunity in India is surely huge. Sectors having potential for International business in India : Information Technology and Electronics Hardware. Telecommunication. Pharmaceuticals and Biotechnology. R&D. Banking, Financial Institutions and Insurance & Pensions. Capital Market. Chemicals and Hydrocarbons. Infrastructure. Agriculture and Food Processing. Retailing. Logistics. Manufacturing. Power and Non-conventional Energy. Sectors like Health, Education, Housing, Resource Conservation & Management Group, Water Resources, Environment, Rural Development, Small and Medium Enterprises (SME) and Urban Development are still not tapped properly and thus the huge scope should be exploited. To foster the international business scenario in India, bodies like CII, FICCI and the various Chambers of Commerce, have a host of services like :

These bodies work closely with the Government and the different business promotion organizations to infuse more business development in India. They help to build strong relationships with the different international business organizations and the multinational corporations. These bodies help to identify the bilateral business co-operation potential and thereafter make apt policy recommendations to the different overseas Governments. With opportunities huge, the International Business trend in India is mind boggling. India International Business community along with the domestic business community is striving towards a steady path to be the Knowledge Capital of the world. It was evident till a few years back that India had a marginal role in the international affairs. The image was not bright enough to be the cynosure among the shining stars. The credit rating agencies had radically brought down the country's ratings. But, as of now, after liberalization process and the concept of an open economy - international business in India grew manifold. Future definitely has more to offer to the entire world. India is now the 10th largest economy in the world and the fastest growing economy, next only to China. As per the Goldman Sach Report 2004.India accounts for a small share in world trade, its exports and imports constitute major economic activities for the country. India is poised to be the second largest economy by 2050. Despite these features, India's involvement with international business is not very impressive. India's share in world trade in 2003 was abysmally low i.e., just 0.8 per cent as compared to those of other developing countries such as Hong Kong (3.0 per cent),China (5.9 per cent), , South Korea (2.6 per cent), Singapore (1.9 per cent),Malaysia (1.3 per cent), , and Thailand (1.1 per cent) . Due to faster growth achieved at the external front, share of foreign trade in the country's Gross Domestic Product (GDP) has considerably increased from 14.6 per cent in 1990-91 to 24.1 per cent in 2003-04. In absolute terms, both the exports and imports have witnessed phenomenal growth over the years. India's total merchandise exports were Rs. 606 crores in 1950-51 which got increased to Rs. 2,93,366 crores in 2003-04, representing an increase of around 480 times over the last five decades or so. Composition wise, textiles and garments, jewellery and gems, engineering products and chemicals and related products and agricultural and allied products are India's major items of India's exports. India even holds the distinct position of being the largest exporter in the world in select commodities such as basmati rice, tea, and ayurvedic products. So far as imports are concerned, products likes crude oil and petroleum products, capital goods (i.e., machinery), electronic goods, pearl, precious and semi-precious stones, gold, silver and chemicals constitute major items of India's imports. Data relating to India's foreign investments - both inward and outward.It can be seen that there has been a phenomenal increase in foreign investments flow into and from India. While the inward foreign investments have grown more than 750 times from just Rs. 201 crores in 1990-91 to Rs. 1,51,406 crores in 2003-04, India's investments abroad have also increased over 4,926 times- from Rs. 19 crores in 1990-91 to Rs. 8,3,616 crores in 2003-04. India's trades in services have also grown diverse over the years. Both the exports and imports of services relating to foreign travel, transportation and insurance have increased spectacularly

during the last four decades. What is more remarkable is the change in the composition of services exports. Software and other miscellaneous services (including professional technical and business services) have emerged as the main categories of India's exports of services. While the relative share of travel and transportation has declined from 64.3 per cent in 1995-96 to 29.6 per cent in 2003-2004, the share of software exports has gone up from 10.2 per cent to around 49 per cent in the corresponding period. A. Composition of India's Exports Britishers strongly believed that India was a country well suited to supply raw materials and other primary goods and a good market place for British manufacturers. So at the time of our independence our exports were predominantly of primary goods and imports were of manufacturers. At the time of independence agricultural commodities and light manufactured consumer goods dominated India's export basket. During the post independence period India's composition of exports changed. Now exports of India's are broadly classified into following four categories.

The composition of India's export can be summarised as follows :1. Agricultural and Allied Products The share of agriculture items in the total exports of India has declined between 1990-91 to 2005-06. The share of agriculture exports was 19.5% in 1990-91. It came down to about 10.2% in 2005-06. The top items of agriculture exports include :Fish Products,

Rice, Oil Cakes, Fruits and Vegetable. 2. Ores and Minerals The overall export performance of ores and minerals is not satisfactory. In percentage terms, the export performance of ores and mineral has increased from 4.4% in 199091 to 5.2% in 2005-06. A major share of ores and minerals exports comes from the export of iron ore. 3. Manufactured Goods The share of manufactured items in the total export earnings of India is on the increase. In 1990-91, the share of manufactured items in the total export earnings was about 73% of the total export earnings. In 2005-06, the share of manufactured items in the total export earnings of India remained stagnant at 72%. The top manufactured export items include :Engineering Goods, Gems and Jewellery, Chemicals and Allied products, and Readymade Garments 4. Mineral Fuel and Lubricants There has been an improvement in the export of mineral fuels and lubricants both in terms of value and in terms of percentage. In percentage terms, its share has increased from less than 2.9% in 1990-91 to 11.5% in 2005-06. Some other facts regarding structural change in India's export since 1991 are as follows :There are indication that during 1990s, some of Indian exports have moved upwards in value addition chain whereby instead of exporting raw materials, the country has switched over to export of processed goods. There were significant compositional shift within the major manufactured product groups such as engineering. goods, chemicals and allied products, etc. B. Composition of India's Imports

In 1947-48 the main items of India's imports were machineries, oil, grains, cotton, cutlery, hardware implements, chemicals, etc. They constituted 70% of India's imports. After that due to the emphasis on industrialisation during the second 5-Year plan necessitated the imports of capital goods. Now imports of India's are broadly classified into following four categories.

Table below shows composition of India's import from 1990-91 to 2005-06.

The composition of India's imports can be summarised as follows :1. Petroleum Products Imports of petroleum oil and lubricants rose significantly from $ 5364 millions in 199192 to $ 43,963 millions i.e. more than eight times. Due to high price of crude oil, the POL imports jumped to $ 15,650 millions in 2000-01. In 1990-91, petroleum products accounted for nearly 25% of total imports of India. In 2005-06, it has further increased to nearly 31% of the total import bill of India. 2. Capital Goods The imports of capital goods was $ 3,610 millions in 1991-92. In 1995-96 due to sharp rise in nonelectrical machinery imports, the imports of capital goods jumped upto $ 8,458 millions. However due to slowing domestic demand imports of capital goods fell subsequently. The capital goods and related

items were 24.1% of the total imports of India in 1990-91, which has come down slightly in 2005-06 to about 22.3%. 3. Pearls and Precious Stones To meet the requirements of the gems & jewellery industry pearls and precious stones are imported in large quantities. In 1990-91, the share of pearls and precibus stones was 8.7% which has reduced in percentage terms to 6.4% in 2005-06. 4. Iron and Steel The imports of iron and steel have declined over the years in percentage terms. In 1990-91, the share of iron and steel imports was 5%, which has come down to 3% in 2005-06. This is because, a good amount of iron ore is now extracted in India which has reduced imports. 5. Fertilizers Import of fertilizers in 1991-92 stood at $ 954 millions. In 2003-04 expenditure on import of fertilizers was $ 635 millions. The import of fertilizers have declined, which indicates less dependence of India on imported fertilizers. The share in total imports of fertilizers was 4.1% in 1990-91, which came down to 1.5% in 2005-06. Conclusion on India's Foreign Trade Composition of India's foreign trade has undergone a positive change. It is a remarkable achievement that India have transformed itself from a predominantly primary goods exporting country into a nonprimary goods exporting country. Under import too India's dependence on food grains and capital goods has declined. The trend indicates structural transformation of Indian economy. Trade in services (% of GDP) in India was 13.93 as of 2010. Its highest value over the past 35 years was 16.08 in 2008, while its lowest value was 1.95 in 1975. Definition: Trade in services is the sum of service exports and imports divided by the value of GDP, all in current U.S. dollars. Source: International Monetary Fund, Balance of Payments Statistics Yearbook and data files, and World Bank and OECD GDP estimates.

TRADE IN SERVICES (% OF GDP) IN INDIA