India's Trade, Exports and Imports

 Having been an agro-based economy, Indian trade has always been devoid of manufactured or
industrial 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 $200.9
billion 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 production
of precious stones and metals. The various other export commodities that India exports are:

 Petroleum products
 Machinery
 Iron and steel
 Chemicals
 Vehicles
 Apparel

India’s main export partners are:

UAE

 US
 China
 Singapore

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

 
 

Indian trade has undergone massive restructuring following the 1991 liberalisation policies. Ever
since, India’s 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 in
need of machinery and energy. Therefore, Indian imports are dominated by crude oil and
machines. Other imported commodities are:

 Precious stones
 Fertilizer
 Iron and steel
 Gold & Silver
 Electronic Goods
 Machinery other than Electrical
 Organic & Inorganic Chemicals
 Metalliferous Ores & Products
 Coal
 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.

 
India’s import partners are:

 China 10.8%
 Saudi Arabia 6.9%
 US 6.7%U
 AE 6.7%
 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. Ever
since, India’s 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%.
 International trade

 
India's share in the global trade, including trade in merchandise and services sector, has
increased from 0.4% in 1980-95 to 1.1 percent in 2004 to 1.5 percent in 2006 and will
cross 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, electronic
products, transport equipment, light machinery as well as chemical and engineering
products. India imports rough diamonds, cuts them, and exports the finished gems. India's
main exports in 2005 included USA 16.7%, UAE 8.5%, China 6.6%, Singapore 5.3%, UK
4.9%, Hong Kong 4.4%. India's services contributed about 35% of the total exports as of
2010-11.
 
Total Exports by India:
Source: Indian Ministry of Commerce and Industry
 
1997-98 2002-03 2005-06 2010-11
Rs 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 of
India 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 import
partners 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 2007-08
 Rs 154,176 Cr. Rs. 297,206 Cr. Rs. 630,527 Cr. Rs. 949,133 Cr.

Deficits:
The value of India's imports is greater than the value of its exports. India uses foreign loans
to 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 $12.9 billion in the year-ago
period. Current account deficit was about US$ 3.7 billion or about 1.4 percent of GDP in
1996-97, down from 3.2 percent in 1990-91.

Key Financial Indicators, 2006

Source: Reserve Bank of India

Key Parameter 1997-98 2002-03 2005-06

Current Account (US$)  -5.5 billion + 3.7 billion - 10.6 billion
CA as a % of GDP  -1.4% + 0.3%
Balance of Payment Rs 16,653 Cr. Rs. 56,592 Cr. Rs. 65,896 Cr.

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

US Trade with its major trading partners, 2002

Source: US Office of trade and Economic Analysis
(in millions of dollars)

Country Negative Trade Balance Rank

China 103,064.7 1
Japan 69,979.4 2
Canada 48,164.9 3
Mexico 37,145.5 4
Germany 35,876.1 5
Ireland 15,692.6 6
Italy 14,163.5 7
Taiwan 13,766.1 8
India 7,717.3 15

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

US Trade deficit, 1790 - 2002

Source: US Office of trade and Economic Analysis
(in millions of dollars)

Year Trade Balance ($ millions)

1790 -3
1800 -20
1850 -29
1900 545
1950 1,043
1980 -24,245
1985 -132,143
 1990 -101,012
1998 -229,758
2000 -436,104
2002 -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 the
industrial, commercial and financial sectors. The trade policy reforms aimed at creating an
environment for achieving a quick quantum jump in exports. Major changes were effected in
the Exim Policy to serve this purpose. Commodity-specific as well as country-specific
liberalization measures were resorted to, to promote further exports. The commerce
ministry and the associated organizations were re-oriented to bring about a totally exporter-
friendly climate.
Emerging global power........

INDIA is in a recovery mode from the hugely impacted global financial meltdown
surfaced in mid-September 2008. An advance estimate of the Central Statistical
Organization 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 revival
of the economy from the onslaught of the meltdown that had impacted among others
India's exports like most of other countries around the world. The cumulative growth for the
period 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 cent
as compared to the growth rate of 6.7 per cent in 2008-09.The growth rate of 7.2 per cent in GDP
during 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, transport
and communication', 'financing, insurance, real estate and business services', and 'community, social
and personal services.

On industry front, the Quick Estimates of Index of Industrial Production (IIP) with base 1993-94 for the
month of December 2009 have been released by the Central Statistical Organisation of the Ministry of
Statistics and Programme Implementation. The General Index stands at 331.7, which is 16.8 percent
higher 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 month
of December 2009 stand at 206.0, 360.7, and 235.2 respectively, with the corresponding growth rates
of 9.5 percent, 18.5 percent and 5.4 percent as compared to December 2008. The cumulative growth
during April-December, 2009-10 over the corresponding period of 2008-09 in the three sectors have
been 8.5 percent, 9.0 percent and 5.8 percent, respectively, which moved the overall growth in the
General 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 earnings
achieved during the comparable period in previous financial year. India’s exports during
December, 2009 were valued at US $14606 million (Rs. 68107 crore) which was 9.3 per cent higher in
dollar 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) registering
a negative growth of 20.3 per cent in Dollar terms and 13.7 per cent in Rupee terms over the same
period last year.

India’s 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 of
imports valued at US $ 19456 million ( Rs. 94625 crore) in December, 2008. Cumulative value of
imports for the period April- December 2009 was US $ 193829 million (Rs. 927969 crore) as against
US $ 253809 million (Rs. 1126199 crore) registering a negative growth of  23.6 per cent in Dollar
terms 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 cent higher
than oil imports valued at US $  4578 million in the corresponding period last year.   Oil imports during
April- December, 2009 were valued at US$ 56918 million which was 29.8 per cent lower than the oil
imports of US $ 81101 million in the corresponding period last year. Non-oil imports during December,
 2009 were estimated at US $ 18217 million which was 22.4 per cent higher than non-oil imports of US
$ 14879 million in December, 2008. Non-oil imports during April- December, 2009 were valued at
US$136911 million which was 20.7 per cent lower than the level of such imports valued at US$
172708 million in April- December, 2008.                                   

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

Its ambitious export target of US $ 200 billion for fiscal year 2008-09* remained
unattainable. Country's achievements in the export sector fell short of that target by
about US $ 32 billion. The provisional estimates of the Federal ministry of Commerce put
exports during FY 2008-09 at US $ 168.70 billion. But for this unexpected global financial
crisis, for India US $ 200 billion was an achievable export target taking into account
country's vibrant economy just before the crisis surfaced world over. India achieved the
marked growth in exports despite appreciation of rupee, high interest rates, spiraling oil
prices, slow down in major trade markets, and withdrawal of some GSP benefits to India
by other countries. Besides export set back, India's yet another ambitious target of
achieving 5 percent share of world trade by 2020 receives a set back, hopefully
temporarily. As a means to achieve the US $ 200-billion-target, a slew of innovative
steps had been initiated in the Foreign Trade Policy (FTP) 2004-09. But for a country
like India having over 1.2 billion population market, the target of achieving 5 percent of
world trade by 2020 is still achievable.

India’s first ever long term FTP was  considered as a roadmap for the development of
country’s foreign trade. The policy initiatives in the last four years had resulted in
increased trade activity and has generated additional employment of 13.6 million. The
new FTP has more than doubled India’s exports in four years. The country’s exports in
2008-09 stood at US$ 168 billion from US $ 63 billion in 2004, registering a cumulative
annual growth rate (CAGR) of 23 percent, year on year, way ahead of the average
growth 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 1.45
percent in 2008 as per WTO estimates. Country's share of global commercial services
export was 1.4 percent in 2003; it rose to 2.8 percent in 2008. India’s total share in
goods and services trade which was 0.92 percent in 2003 increased to 1.64 percent in
2008. On the employment front, studies have suggested that nearly 14 million jobs were
created 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 -64303

Germany 67,602 -19497

Singapore 63,280 2934

UK 50114 524

Hong Kong 50,129 1772

Belgium 41552 -5294

Netherland 33099 19049

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 over
previous fiscal’s US $ 163.132 billion. In Rupee (Indian currency) terms, exports stood at
Rs.766935 crore registering an increase of 16.9 percent over previous fiscal’s Rs
Rs.655863 crore. Imports in financial year 2008-09 stood at US $ 287.759 billion against
US $ 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 2008-09
to 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 Federal
Ministry of Commerce, stands at US $ 119.055 billion which is significantly higher than
the 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) that
was announced in August, 2009 is to arrest and reverse the declining trend of exports
and to provide additional support especially to those sectors which have been hit badly
by 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 March
2011 and around 25 percent per annum for the remaining three years ending 2014. The
government's objective is to achieve an annual export growth of 15 percent with an
annual export target of US$ 200 billion by March 2011. In the remaining three years of
the new Foreign Trade Policy (2009-2014), the country should be able to come back on
the high export growth path of around 25 percent per annum, hopes country's
Commerce and Industry minister Anand Sharma.

By 2014,  India’s exports of goods and services are expected to double. The long term
policy objective for the government is to double India’s share in global trade by 2020. In
order to meet these objectives, the government would follow a mix of policy measures
including fiscal incentives, institutional changes, procedural rationalization, enhanced
market access across the world and diversification of export markets. Improvement in
infrastructure related to exports; bringing down transaction costs, and providing full
refund of all indirect taxes and levies, would be the three pillars, which will support us to
achieve this target. Endeavour will be made to see that the Goods and Services Tax
rebates all indirect taxes and levies on exports. 

Initiatives are being taken to diversify country's export markets and offset the inherent
disadvantage for our exporters in emerging markets of Africa, Latin America, Oceania
and CIS countries such as credit risks, higher trade costs etc., through appropriate policy
instruments. The government has already endeavored to diversify products and markets
through rationalization of incentive schemes including the enhancement of incentive
rates which been based on the perceived long term competitive advantage of India in a
particular product group and market. New emerging markets have been given a special
focus to enable competitive exports. This would of course be contingent upon availability
of adequate exportable surplus for a particular product. Additional resources have been
made available under the Market Development Assistance Scheme and Market Access
Initiative Scheme.
Incentive schemes are being rationalized to identify leading products which would
catalyze the next phase of export growth. As part of market expansion policy,India has
signed a Comprehensive Economic Partnership Agreement with South Korea which will
give enhanced market access to Indian exports. Besides India has also signed a Trade in
Goods Agreement with ASEAN which will come in force from January 1, 2010, and will
give enhanced market access to several items of Indian exports. These trade agreements
are in line with India’s Look East Policy. India has also signed  Preferential Trade
Agreement 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  14.3

TRADE BALANCE  
2007-08 --88522

2008-09 -119055

Source: DGCI&S  
* India's fiscal year is March to April
Source: Federal ministry of Commerce, Government  
of India

India’s Commerce and Industry minister Anand Sharma has told the Cairns group (a
coalition of 19 agricultural exporting countries promoting free trade in agriculture) India
is committed to the successful conclusion of the Doha process through a constructive
engagement. In a recent address at a Cairns group meeting in Bali (June 8, 2009) the
minister while emphasizing on the need for resumption of negotiations based on the draft
reports on Agriculture and NAMA, stated that the ‘development dimension’ of the Doha
round must be central to all discussions and the aspirations of all developing countries
for 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, as
there is a need to have a rule-based multilateral global trading system and the
government will continue to take inputs from various stakeholders in the country", the
Commerce minister told the industry body Confederation of Indian Industry (CII). While
a perfect solution may be elusive, it should be possible to find a fair solution acceptable
to all parties, while keeping in mind that development was central to the Doha Round, he
said at the annual summit 2009 of the US India Business Council which was attended by
US Secretary of State Hillary Clinton. The existing level of trade and economic
engagement is not commensurate with India's potential, which exists due to India’s far-
reaching economic liberalization. India maintains that protectionist tendencies of some
developed countries in times of economic downturn would adversely impact developing
countries.

"The principal aim of India’s negotiating strategy in the agriculture negotiations has been
to protect the interests of farmers particularly with regard to their food and livelihood
security. Substantial and effective reductions in domestic support and customs tariffs by
developed countries, while enabling developing countries to protect and promote the
interests of their low income and resource poor farmers, is a key priority for India and
other 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 reduction
commitments than other products and the Special Safeguard Mechanism (SSM) to
safeguard the interests of farmers in the event of surges in import volumes or a fall in
prices would be utilized by India for protecting low income and resource poor farmers of
the country...A successful conclusion of Doha round is essential to create a fair and
equitable, rule-based multilateral trade regime best serves the needs of developing
countries", Jyotiraditya M. Scindia, Minister of State for Commerce & Industry told
members of the Upper House of Indian Parliament on July 8, 2009. 
 BALANCE OF PAYMENT

Shrinking foreign trade

INDIA’s trade deficit during the first nine months of fiscal 2009-10 on a balance of
payments (BoP) basis was lower at US$ 89.51 bn compared with US$ 98.44 bn during
the same period in fiscal 2008-09. The trade deficit on a BoP basis in Q3 (US$ 30.72
billion) was, however, less than that in Q3 of 2008-09 (US$ 34.04 billion). This is
revealed in e report (India's Balance of Payments Developments during the first
quarter (October-December) of 2009-10) of the country’s central banking authority
Reserve Bank of India (RBI).

The key features of India’s BoP that emerged in Q3 of fiscal 2009-10 were:(i) Exports
recorded a growth of 13.2 per cent during Q3 of 2009-10 over the corresponding quarter
of the previous year, after consecutive declines in the last four quarters.(ii) Imports
registered a growth of 2.6 per cent in Q3 of 2009-10 after recording consecutive declines
in the last three quarters.(iii) Private transfer receipts remained robust during Q3 of
2009-10.(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 current
account deficit during April-December 2009 was higher at US$ 30.3 billion as compared
to US$ 27.5 billion during April-December 2008.(vi) Surplus in capital account increased
sharply 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, NRI
deposits and commercial loans.(vii) As the surplus in capital account exceeded the
current 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 billion
during April-December 2008).

Major Items of India's Balance of Payments

(US$ million)
 
April-December April-December
  (2007-08) (PR) (2008-09) (P)
(2008-09) (PR) (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
-17034 -29817 -27516 -30330
Balance

Capital Account* 109198 9737 7136 41630

Change in Reserves#
-92164 20080 20380 -11330
(+ indicates
increase;- indicates
decrease)
Including errors & omissions; # On BoP basis excluding valuation; P: Preliminary, PR: Partially revised. R: revised

SOURCE: Reserve Bank of India Report

Invisibles

The decline in invisibles receipts, which started in the Q4 of 2008-09, continued during
Q3 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 in
business, communication and financial services, and investment income receipts.
Although, software exports recorded a robust growth of 15.3 per cent, services exports
as a whole witnessed a decline of 12.3 per cent during the quarter as against an increase
of 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, as
compared with an increase of 22.2 per cent in the corresponding period of the previous
year, mainly due to the lower receipts under almost all components of services coupled
with 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 in
payments 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 investment
income account.

Invisibles Balance

Size of invisibles surplus in Q3 of 2009-10 was, however, lower than Q3 of preceding

year. 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 billion
during April-December 2009 as compared with US$ 70.9 billion during April-December
2008. At this level, the invisibles surplus financed 66.1 per cent of trade deficit during
April-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 billion
during April-December 2009 as compared with US$ 70.9 billion during April-December
2008. At this level, the invisibles surplus financed 66.1 per cent of trade deficit during
April-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 as
compared with US$ 5.8 billion in April-December 2008 mainly due to larger inflows under
FDI, portfolio investments and NRI deposits

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

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 due
to large net FII inflows of US$ 20.5 billion.

Net external commercial borrowings (ECBs) inflow slowed down to US$ 2.3 billion in
April-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) was
US$ 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 in
Foreign Exchange Reserves is separately issued].

The gross disbursements of short-term trade credit was US$ 10.1 billion during Q1 of
2009-10 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 of
2008-09). As a result, there were net outflows of US$ 3.1 billion under short-term trade
credit 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. NRI
deposits constitute major part of the foreign liabilities. Banking capital (net), including
NRI deposits, were negative at US$ 3.4 billion during Q1 of 2009-10 as against a positive
net inflow of US$ 2.7 billion during Q1 of 2008-09. Among the components of banking
capital, NRI deposits witnessed higher inflows of US$ 1.8 billion in Q1 of 2009-10 (net
inflows of US$ 0.8 billion in Q1 of 2008-09) reflecting the positive impact of the revisions
in the ceiling interest rate on NRI deposits.

Other capital includes leads and lags in exports, funds held abroad, advances received
pending 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 Trade
Exports

On a BoP basis, India’s 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 of
the 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 same
period 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 a
negative 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.                           
      

 
EXPORTS & IMPORTS (April-February, FY 2009-10)
 
  In $ Million In Rs Crore
Exports including re-exports
2008-09 172379 774585
2009-10 152983 727345
Growth 2009-10/2008-2009
-11.3 -6.1
(percent)
Imports
2008-09 287099 1289412
2009-10 248401 1180124
Growth 2009-10/2008-2009
-13.5 -8.5
(percent)
Trade Balance
2008-09 -114721 -514827
2009-10 -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 than
the 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 per
cent during April-December 2009 as compared with a high growth of 35.6 per cent in the
corresponding 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 per
cent) 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 both
lower 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

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

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

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

 Variation in Reserves

During April-December 2009, there was an accretion to foreign exchange reserves mainly
on account of valuation gains. Also, inflows under foreign investments, Non-Resident
Indian deposits and short-term trade credits have contributed significantly to the
increase in foreign exchange reserves during April-December 2009.

On balance of payments basis (i.e., excluding valuation effects), the foreign exchange
reserves increased by US$ 11,300 million during April-December 2009 as against a
decline of US$ 20,380 million during April-December 2008. The valuation gains,
reflecting the depreciation of the US dollar against the major currencies, accounted for
US$ 20,185 million during April-December 2009 as compared with a valuation loss of
US$ 33,375 million during April-December 2008. Accordingly, valuation gains during
April-December 2009 accounted for 64.1 per cent of the total increase in foreign
exchange reserves.

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