India's export share touches 1%

India's share in world merchandise exports has crossed the 1 per cent mark and continues to stay at that level.

It touched 1 per cent of global exports in 2005, and in January-August 2006, the share continues to be above 1 per cent.

The latest Economic Survey shows that this share had been stagnating for the past few years and stood at 0.7 per cent in 2001. It stabilised at 0.8 per cent between 2003 and 2004.

The country could increase its share of global merchandise exports as domestic exports grew by more than double the rate of growth in world exports since 2005. External factors like improved global growth and recovery in global trade aided the growth.

The government has set a target of achieving 1.5 per cent of total world exports by 2009. "This target, though difficult, is achievable considering the current performance of the industry and the government policies," said Bishwajit Dhar, professor, Indian Institute of Foreign Trade.

The Economic Survey points out that the growth of Indian exports in 2005, which stood at 30 per cent, surpassed China's 28.5 per cent growth. But in terms of value, China recorded $ 762 billion worth of exports during 2005, which was way higher than India's export earnings of $ 99.5 billion.

In the financial year 2005-06, in terms of volume, Indian exports recorded a 45.4 per cent increase in items like petroleum products, chemicals, machinery and transport equipment, while in terms of unit value, a 20.4 per cent growth was recorded.

However, there was a sharp decrease in the country's net and income terms of trade during financial year 2005-06. The net terms of trade, which measures the unit value index of exports as a proportion unit value index of imports declined by 27 per cent -- the highest fall since 1990--on account of a sharp rise in price of crude petroleum. The income terms of trade also declined sharply by 33.2 per cent in 2005-06. A declining terms of trade means that a country has to pay more for the products it imports.